Project finance company Joule Assets has partnered with corporate advisory firm Quantum Origination to launch its joint SmartCity Enterprise Investment Scheme (EIS) to benefit smart energy companies across the UK.
The purpose of the SmartCity Enterprise Investment Scheme Portfolio is to identify, invest in and support innovative companies within the smart city technology sector that are seeking to optimise energy consumption across different sectors of a city’s infrastructure – including lighting, buildings, renewables and transport.
The partners are reported to have “identified potential investment opportunities and provides investors ground floor access to SMEs within the smart city technologies and energy sectors.”
Traditionally, energy funds focus on one particular aspect of smart city development such as generation or storage. The SmartCity EIS Portfolio is said to create additional returns by investing in companies to create synergies between sectors.
According to Jonathan Evans, managing director of Quantum Origination and Portfolio Adviser of the SmartCity EIS Portfolio, said: “Typically, EIS funds in the energy sector have focused on funding asset-based investments which have benefitted from government incentives, such as feed-in tariffs from solar farms.
“Our objective differs in that we are seeking to fund UK innovation in the equipment and services that can impact energy efficiency. More specifically, we are also supporting new projects that will deploy these technologies, such as building energy refits, new property developments, and Local Authority street-lighting, etc.”
US$150m to kick off investment
To kick-off investment, Bloomberg reports that Joule Assets plans to raise GBP100 million (US$150 million) by the end of 2015 in a bid to invest in UK companies helping business and homeowners reduce energy waste and cut bills.
According to Jessica Stromback, senior vice president, Europe at Joule Assets & executive director of the Smart Energy Demand Coalition, there are parts of the UK energy market that have not yet been exploited to achieve greater gains in energy efficiency and saving power.
Stromback adds: “Our proposition is unique because we will provide equity finance for companies through the EIS that they can use to fund commercialization and growth, and through Joule we’ll then also provide debt that they can invest directly in projects.
“We’re targeting electricity sales companies that create an ecosystem for customers, providing advice and information technology systems allowing them to optimize their use of renewable energies and energy efficiency.”