KKR invests in UK renewables sector

The global investment firm has partnered with the Green Investment Bank and Temporis Capital to launch a £200m lending programme.

Alternative asset manager Kohlberg Kravis Roberts & Co (KKR) and the UK’s Green Investment Bank (GIB), will each provide up to £200 million (€254.8 million; $317.7 million) for a lending programme that will be used to fund community-scale energy projects in the UK, the New York-based firm said in a statement. London-based specialist investment management firm Temporis Capital will manage the lending programme.

The programme marks a first for both KKR and GIB in different respects.

KKR, which will be making the investment mostly from its own balance sheet, has invested in renewable energy in the US, Mexico, Australia, France, Italy, Spain, Portugal and South Africa. However, this is the first time it is investing in the UK renewable energy sector.

GIB, an environment-focused lender launched by the UK government in November 2012 with £3.8 billion in funding, is investing for the first time in community-scale renewables. It is able to do so after the European Commission allowed the bank to expand its mandate in May to include community-scale renewable projects in response to a funding gap in the market.

The announcement comes just days after GIB said it would be investing £33 million alongside the European Investment Bank's £150 million in a new waste facility in North Yorkshire.

“Today’s announcement represents an important milestone for the UK as we launch the first non-bank lending platform dedicated exclusively to the renewable energy sector,” Temporis Capital chief executive David Watson said. “With the support of KKR and GIB, I am confident we will be providing much needed funding to UK community-scale wind and hydro projects,” he added.

Temporis Capital pursues listed equity, asset finance, debt, private equity and infrastructure strategies solely in the sustainability sector. It invests in, builds and operates wind, solar, hydro and biomass projects in the UK and selected regions around the world.

According to the statement, Temporis expects the first project to be financed through the programme will be in Scotland. It did not specify the type of project but it expects an agreement to be signed shortly, it said.