The UK Green Investment Bank (GIB) will provide £18m of funding towards a new energy innovation centre for Cambridge University Hospitals NHS Foundation Trust, in what will be its first investment in the NHS. GIB’s participation mobilises a further £18m of private capital into the project.
The funds provided for the energy centre are part of a commitment of £50m to the Aviva Investors REaLM Energy Centres Fund, which specialises in investment in non-domestic UK energy centres. This fund forms part of GIB’s allocation of funding into one of its priority sectors, non-domestic energy efficiency.
The investment in the Trust will finance one of the largest projects of its type in the UK and is designed to deliver substantial financial and carbon emissions savings for the Trust. The new energy innovation centre will house a combined heat and power unit, biomass boiler, efficient dual fuel boilers and heat recovery from medical incineration. It will provide heat and power to the Trust including the Addenbrooke’s and RosieHospitals.
As an alternative to sourcing power from the National Grid, the Trust will benefit from the energy centre’s materially lower energy costs and carbon emissions, with predicted savings of over £20 million in energy costs over the 25 year operational term of the project and expected CO2 savings in excess of 25,000 tonnes per annum. The project is subject to final planning approval.
UK Green Investment Bank chairman, Lord Smith of Kelvin, said “Non-domestic energy efficiency is a priority sector for the Green Investment Bank and this deal is an early demonstration of our strategy to partner with co-investors and deliver a commercial return to the bank, whilst reducing carbon emissions in the UK.
“We are delighted to be working with Aviva Investors, Cambridge University Hospitals NHS Foundation Trust and MITIE on this project.”
Ian Berry, fund manager, Infrastructure & Renewable Energy at Aviva Investors, added: “The development of UK energy centres is a very exciting new area for long-term investors such as pension funds. They can achieve stable, diversified and relatively low risk income streams, while also helping to fund important infrastructure projects that deliver long term savings and sustainability benefits to their clients.
“We are delighted to be involved in this development, working with Cambridge University Hospitals NHS Foundation Trust, the UK Green Investment Bank and MITIE to fund, build and operate what is expected to be one of the largest NHS energy centre projects of its kind.”