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European Investment Fund allocates £109m to tackle data centre energy waste

Written by Mon 20 Nov 2023

The European Investment Fund (EIF) has invested £125 million ($135 million) into a private fund dedicated to cutting down waste energy from locations like data centres and hospitals.

The EU’s investment arm allocated the funds to the ‘Green Energy Solutions Fund’, run by Sustainable Development Capital (SDCL). The investment helped the Green Energy Fund hit its fundraising target of £881 million ($707 million) in October.

“We see a big market failure. Energy efficiency is an area where there are tremendous needs … We step into funds where we see a particular added value and where we are not crowding out private investors,” said Roger Havenith, Deputy Chief Executive of the EIF.

The EIF fund has agreed to deploy 66% of its capital within the EU’s 27 member states. The EIF spends up to £13.1 billion (€15 billion) each year. 

Projects will include building a solar power or waste-to-heat plant. The EIF fund will also be utilised to help retrofit buildings. 

Chief Executive Officer of SDCL, Jonathan Maxwell, emphasised the substantial focus on reducing carbon emissions through the promotion of renewable energy sources. However, the critical issue of energy loss in these processes is often neglected despite being just ‘as important a problem’.

Maxwell stressed that 70% of energy can be wasted in the journey from molecule to extraction and eventually to end-use. This figure underscored the importance of concurrently addressing energy wastage alongside global initiatives to reduce emissions by transitioning from fossil fuels.

Yet, renewable energy projects have faced challenges like supply chain blocks and pressure from inflation. With investors dumping cleaner energy stocks, confidence appears shaken within the financial viability of renewable energy projects.

Maxwell said the attractive market incentives under the U.S. Inflation Reduction Act and various EU schemes have the potential to boost returns for those invested in the EIF fund.  

The majority shareholder of EIF, the European Investment Bank, had previously invested in an SDCL-run British Energy Efficiency Investment Fund.

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Written by Mon 20 Nov 2023

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