London Green Fund

Waste Urban Development FundProcurement Information Event

20 May 2010

London Green Fund

Lurene Joseph – Group Director of Communication,Marketing and European Programmes, LDA

London Green Fund

Waste Urban Development Fund Procurement Information Event

Agenda

Registration 9.00 – 9.30am

Section I – London’s Environment Strategies 9.30 – 10.20am

1. Welcome and Opening Remarks – Lurene Joseph, London Development Agency

2. GLA Environment Programme - Isabel Dedring, Mayor’s Advisor for Environment

3. Role of the London Waste and Recycling Board - Andy Holdcroft, COO, LWARB

4. EIB - Supporting the London Green Fund - Simon Brooks, Vice President, EIB

5. Questions & Answers

Comfort Break 10.20 – 10.30am

Section II – Waste UDF Procurement

6. Waste UDF Procurement – Frank Lee, Head of Holding Funds and AdvisoryNorthern Europe / Steven Henderson, UK Holding Fund Manager

7. Questions & Answers

Networking and refreshments 11.00 – 11.30am

London Green Fund

Isabel Dedring - Mayor’s Advisor for Environment

5

Leading to a Greener London

GLA environment programme

May 2010

6

General approach

• Practical programmes that deliver, at scale and pace

• Public role as procurer, strategy setter, catalyst/partfunder, ‘champion’

• New angle for green comms (“stop overdosing ongloom”)

• Local issues as a route in to global issues

7

Main programmes

Making London greener, cleaner and more civilised

Turning London’s waste into a resource

Delivering a Low-Carbon London

Moving to a low-emission transport system

8

Key facts

• 65% of London’s area is green or blue

• Proposed measures will enhance 1,000 hectares of green space

• Increasing inner London’s ‘greenness’ by 10% could offsetpredicted urban heat island effect over the next century

• Litter and pollution are consistently high environmental prioritiesfor Londoners

9

Greener, cleaner, more civilised (I)

• 110,000 votes on 10+1 parks: Design worksunderway, all works complete by 2012

• 10,000 new street trees: Half planted

• Capital Growth: 2,012 new food growingspaces by 2012

• New London Plan measures

o London-wide Green Grid

o Green roof ‘prospectus’

o Protection for allotments, gardens

o Tree cover targets

10

Greener, cleaner, more civilised (II)

• Clean Up London: Littercampaigns with partners inrunup to Olympics

• Air quality strategy: Actionplan to deliver and gobeyond EU compliance

• Urban realm improvements: Great Spaces Initiative

• Increase volunteering: Volunteer London, Olympicvolunteers, GLA staff

11

Main programmes

Making London greener, cleaner and more civilised

Turning London’s waste into a resource

Delivering a Low-Carbon London

Moving to a low-emission transport system

12

Key facts

• London produces 22 million tonnes of waste each year

• London recycles 25% of municipal waste – low compared tomany other cities

• Rise of new technologies, but 99% of London’s black bag wastestill goes to landfill or incineration

• London’s waste could deliver 10-20% of London’s energy needs

13

Turning waste into a resource

• London Waste and Recycling Board: £84m three yearfund with strong pipeline

• 3 year “Recycle for London” campaign including on-the-go recycling, reduction and reuse

• Waste Strategy and London Plan: New targets coming in

• Food Waste to Fuel Alliance: 5 demonstration projects

• RecycleBank andsimilar approaches:Aiming for Londonpilots in 2010-11

14

Main programmes

Making London greener, cleaner and more civilised

Turning London’s waste into a resource

Delivering a Low-Carbon London

Moving to a low-emission transport system

15

Key facts

• London’s carbon footprint: ~45 million tonnes/year.

• Roughly 40% domestic, 40% commercial and public sector, 20%transport

• Buildings are three-quarters of London’s emissions, and 80% ofLondon’s buildings will be around in 2050

• 100,000 London homes have a low standard of protectionagainst flooding

• Significant urban heat island effect expected

16

Low-Carbon London (I)

• Re:Fit (Building EnergyEfficiency Programme): UK-wide OJEU framework; 60organisations in pipeline

• Re:New (Homes EnergyEfficiency Programme):10,000 homes underway,200-500,000 by 2012

• New build: introducing newLondon Plan requirements

Insulation Building managementtechnologies

Cooling equipmentLow carbonheating

17

Low-Carbon London (II)

• Decentralised energy funding:Targeted investment in specificprojects

• London Heat Portal andenergy masterplanning:Underway across London; toinclude waste and electricity

• Low Carbon Zones: 10 Zonesup and running

18

Low-Carbon London (III)

• Adaptation Strategy: Shift in focus to delivery includingneighbourhood flood planning and water efficiency retrofits

• JESSICA/ London Green Fund: £100m+; up and running2010

• Low-Carbon Economy: Specific action plan for London;launching late spring 2010

• Green Enterprise District in the Thames Gateway:Prospectus coming out late spring 2010

19

Main programmes

Making London greener, cleaner and more civilised

Turning London’s waste into a resource

Delivering a Low-Carbon London

Moving to a low-emission transport system

20

Key facts

• London has a far lower transport carbon footprint than mostcomparable cities

• Nearly 30 million trips per day in London

• Major opportunity to address air quality and CO2 at once

• Mode shift and low-emission vehicles are both needed

21

Transport

• Cycling revolution: Bikehire scheme July 2010

• Electric Vehicle DeliveryPlan: Including over 7,000EV charge points in next 3years

• Underground green power

• Bus fleet: All new buses hybrid from 2012

• LED lighting: Traffic light conversion starting 2010

22

Final points

• Energy efficiency, waste and DE are the 3 biggestcarbon reduction opportunities for London

• Unprecedented levels of funding from GLA, but“valley of death” risk

• Greater leverage already in place but needs to beexpanded

23

Leading to a Greener London

GLA environment programmeMay 2010

www.london.gov.uk

24

LWARB’s Role

Andy Holdcroft: Chief Operating Officer

252525

LWARB Service Offering

•Financial Support

•Brokerage and project development support

•Best practice co-ordinator

26262626

Mayor’s preferred approach

2727

What is the Capacity Gap?

Note: figures in tonnes 000s

Wet AD Dry AD /

Composting

MBT /

AD

RDF

Production

Thermal

Treatment

(RDF)

MRF Total

2015 80 820 280 30 290 1,590 3,090

2020 200 990 370 (380) 550 2,370 4,100

2030 820 1,020 1,040 980 1,730 3,440 9,030

282828

Projects funded to date

• Recycle for London - Sep 2008 - £1.5m

• Trinity– Oct 2009 - £100k

• Recycle for London - Nov 2009 - £5m

• Fareshare – Mar 2010 - £362k

• Bioregional – Apr 2010 - £500k

2929

Allocation by Treatment Type

Number of

facilties

Average

Capacity

('000 tonnes)

Total

Capacity

delivered

('000 tonnes)

Total cost

(£000)

LWARB

Funding

(£000)

MRF 3 150 450 60,000 12,000

AD 2 50 100 30,000 6,000Thermal 1 150 150 80,000 7,273

MBT 1 150 150 30,000 2,727

Total 7 850 200,000 28,000

• Total capacity delivered more important than numbers

• LWARB require 4:1 leverage on projects below circa £25m and £10:1for projects above £25m

• Number of facilities derived from gap need (rounded to nearest wholefacility)

3030

How will the ‘capacity gap’ methodologyinfluence LWARB’s activities

• LWARB will continue to look at London’s wasteholistically, to merge the management of municipal andC&I waste where synergies exist

• LWARB must successfully facilitate the delivery of theviable proposals from its portfolio – create a pool ofaround 20 projects to deliver the Business Plan

• Final call for projects – expressions of interest by end ofJune 2010

3131313131

Summary of large scale infrastructure projects in pipeline

Organisation Technology Location(borough)

Waste treated(tpa)

Est.operational

date

Amount fromLWARB: total

cost (£million)

Grant/Commercial

AD 46,000 End 2011 Grant / Comm.

AD 30,000 Start 2012 Grant

AD 50,000 End 2011 Comm. / Grant

AD 15,000 End 2011 Commercial

AD 55,000 End 2011 Grant

AD 30,000 End 2011 Grant

AD 20,000 End 2011 Commercial

RDF 110,000 Mid 2011 Commercial

Reprocessing -plastic

50,000 Start 2011 Grant / Comm.

Reprocessing -plastic

17,000 End 2011 Commercial

AerobicDigestion

36,500 End 2010 Commercial

Pyrolysis 200,000 Mid 2011 Commercial

Pyrolysis 90,000 Start 2012 Commercial

Pyrolysis 80,000 Start 2012 Grant / Comm.

Complex MRF /Pyrolysis

100,000 Start 2012 Commercial

Complex MRF 140,000 Start 2011 Commercial

323232

LWARB and the London Green Fund

• Complementary rather than competing funds

• Potential partnering arrangement

• Independent evaluation process and criteria

• Both funds can contribute to the same project

• London Green Fund targets commercial returns

• LWARB fund fill the gap and supports commercial returns

33www.lwarb.gov.uk

3434

EIBEIB –– supporting thesupporting theLondon Green FundLondon Green Fund

Simon Brooks

Vice President

European Investment Bank

3535

EIB roleEIB role

EIB is the principal JESSICA promoter and HoldingFund Manager in the UK and across the EU …including London

• Overview of EIB JESSICA Task Force

• What is JESSICA?

Holding Fund

UrbanDevelopment

Fund

Project Portfolio

Loans,equity orguarantees

3636

A growing commitment to the sectorA growing commitment to the sector

Our role in the London Green Fund is part of a widercommitment to the environmental sector in Londonand the UK

Alignment with the Bank’s objectives:

• Protecting and Improving the Environment and PromotingSustainable Communities

• Supporting Sustainable, Competitive and Secure Energy

EIB funded over EUR 25 billion of projects in theenvironmental sector in 2009 – 32% of total lending

3737

(a) Project development / technical assistance – ELENA and“Covenant of Mayors”

(b) Infrastructure fund investments

(c) Large scale public / private partnerships

Some examplesSome examples

Wide ranging support to sector

Greater Manchester Energy From Waste CHP plant – completion date 2012

London Green Fund

Session I

Q & A

London Green Fund

Frank Lee - Head of Holding Funds and Advisory,Northern Europe, EIB

Steven Henderson – UK Holding Fund Manager, EIB

4040

Waste Urban Development FundWaste Urban Development FundProcurementProcurement

Frank Lee and Steven Henderson

JESSICA division

European Investment Bank

4141

Projects must be part of an Integrated Plan for SustainableUrban Development, which for the waste UDF is both theLondon Plan and the Mayor of London’s Municipal WasteManagement Strategy

Projects must involve the establishment of:

• value adding re-use, recycling and/or reprocessing facilities

• waste to energy facilities; and/or

• other facilities displacing fossil fuel such as ‘waste to fuel’

Projects must involve capital asset development /construction / expansion – not general waste operations

What will the waste UDF invest in?What will the waste UDF invest in?

4242

Waste UDF structureWaste UDF structure

Project

Waste UDF Other UDF(s)

£35m investment

EuropeanCommission

London Green Fund

(EIB fund manager)

LWARB LDA

Project Project Project

Project level repayable investment (equity/debt)

Private sector paripassu co-financing

Urban Project level public & private

additional financing

4343

• Key date – 31 December 2015

• UDF expected to work with LWARB to identify co-investment opportunities

• Closed ended structure; fixed life expected circa 10years; all capital and returns paid back to LGF

• Management fee – Expectations of 2% p.a. asbenchmark during investment period, and lessthereafter

Some key pointsSome key points

4444

Stage 1 (by 4 June):

• Provide a declaration of your suitability (including FSAauthorisation)

• Illustrate credible experience

Stage 2 (by 13 August, only after invitation):

Provide an Offer (in the form of a business plan) showing:

• Governance and legal structure (including team)

• Investment strategy

• Sourcing of co-finance

• Management fees

Response RequirementsResponse Requirements

Elements of the evaluation process

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www.eib.org/jessica

EIBEIB CONTACTCONTACT INFORMATIONINFORMATION

ClarificationClarification questionsquestions forfor stage 1stage 1inin writingwriting onlyonly byby TuesdayTuesday 2525 MayMay

Isabelle Rei (Procurement Officer)

European Investment Bank98-100, Boulevard Konrad Adenauer

L-2950 Luxembourg

fax: +352 437 968 167email : EIB.ASA@eib.org

London Green Fund

Thank you for attending.