On Tuesday 24 September, members of BusinessLDN’s Infrastructure group met with Emily Sidhu, Managing Director of Banking and Investments and Iain Watson, Director, Local Authority Advisory & Lending at the UK Infrastructure Bank, kindly hosted by Turner & Townsend at their office at One New Change, St Pauls.
This was the third such meeting of the Business LDN Infrastructure group with the Bank team since they published their Strategic Plan in 2022. The Business LDN Infrastructure Group, with support from Turner & Townsend meets with the Bank regularly to reflect on its progress against strategic objectives and to address the challenges faced in infrastructure development and financing in London and the Southeast.
This meeting was an opportunity for BLDN members to share their views on the key challenges associated with financing needed by Local Authorities (LA) and for emerging infrastructure technologies. This covered new technology scale-ups, planning and consenting, business case development, lack of development/seed capital, the use of hydrogen for large scale construction, and commercialisation of benefits derived from climate resilience schemes, to mention just a few discussion points.
Sacira Coric, of Turner & Townsend chaired the roundtable and opened the discussion by reflecting on the fast-evolving policy and regulatory environment and several initiatives and bodies the new government has launched to enable an effective transition to net zero. Hannah Kitcherside spoke about Turner & Townsend’s work for Heathrow, Lower Thames Crossing and Thames Water, and their respective green ambitions in particular, in relation to unlocking private capital.
Juliet Flamank, of the Green Finance Institute (GFI) highlighted the GFI’s role as National Wealth Fund Taskforce Secretariat and chair as well as its advisory work on the GLA Green Finance Fund and some of the challenges facing a battery-scale up supply chain.
Gyula Torzsok, of The Thames Estuary Growth Board shared the Board’s ambition to develop the Estuary as a fair clean and green growth-driven opportunity for global investors and work underway to facilitate the use of the Thames for decarbonisation and green logistics projects.
Over the past three years, the UKIB has deployed circa £3.78bn overall, which has unlocked £11bn of private capital including £600m of local authority lending. The Bank has used different financing products available at its disposal and has flexibility in terms of long-term loans versus bridging loans, revolving capital facilities and blending finance with other sources.
Their key objectives are to crowd-in private finance and de-risk investment opportunities to support regional growth and delivery of net zero. UKIB outlined some examples of transactions on the private side, including direct debt into a grid-scale battery facility in Kent, an equity injection into first of a kind semi-conductor technology and a guarantee to support rural fibre broadband rollout, and, on the local authority side, has provided a long-term loan for the TfL DLR Improvement project which will deliver 54 new trains and signalling and depot upgrades, and cornerstone financing to the GLA Green Finance Fund for net zero and energy efficiency projects across the London boroughs.
Many clean growth and decarbonisation opportunities start at local and regional level where significant capacity and capability development is needed. The GLA Green Finance Fund is an example of good practice which can be adopted by other authorities across the UK. Some of the major challenges LA’s and public bodies are facing is demonstrating bankability of their schemes, the ability to commercialise revenue streams, overcoming planning and consenting challenges and securing funding to develop business cases which robustly evaluate wider societal benefits. UK Government funded Net Zero Hubs were mentioned as a great vehicle for LA’s to share knowledge and best practice.
The Bank is committed to supporting the development of the industrial clusters covering carbon capture usage and storage and hydrogen, and also sees a growing pipeline of investment opportunities in EV infrastructure, retrofit and EV factories.
We look forward to continuing this collaboration with the Bank’s teams as they continue to grow and as new Government policy on infrastructure takes shape, bringing the expert views of our members to support delivery of finance to address London’s key infrastructure challenges.
For more information on BusinessLDNs infrastructure programme, including an upcoming briefing with the CEO of the Infrastructure and Projects Authority, or to find out about getting involved in the Infrastructure Group, please get in touch with John Kavanagh, Programme Director, Infrastructure.