Green investment trust wins multi-million pound backing from UK government

The UK government has pledged up to £25m for a newly-listed investment trust as part of a drive to plough more money into sustainable investment projects in emerging markets and developing economies.

The government’s investment in the ThomasLloyd Energy Impact Trust will come from a £66m pot sidelined for its Mobilist programme — an initiative run by the Foreign, Commonwealth & Development Office which seeks to develop new investment products listed on public markets.

The trust, which debuted on the London Stock Exchange on 4 November, is the first ever emerging markets renewable energy product to list on the bourse. It is also the first investment trust dedicated to infrastructure in Asia that has been seeded by the UK government.

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ThomasLloyd, a Zurich-headquartered impact investment manager founded in 2003, aims to raise more than $300m from the listing and has identified investment opportunities in India and the Philippines as well as Indonesia, Vietnam, Bangladesh and Sri Lanka.

The trust will invest the IPO proceeds in unlisted sustainable energy infrastructure assets focused on renewable power generation, energy storage and sustainable fuel production across emerging economies in Asia, which is the largest emitter of carbon dioxide.

Asia’s population of 4.6 billion people account for more than half of global energy consumption, and carbon emissions in Asia are now greater than Europe and North America combined.

Emerging markets and developing countries face significant shortfalls in their private sector financing to the tune of around $2.5tn a year. Low and low middle-income countries need around $1.4tn of this total.

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The ThomasLloyd trust is one of several investment products that have secured funding from the government’s Mobilist programme, after the FCDO ran a competition in February to engage financial institutions in a search for sustainable infrastructure proposals. Five finalists, including ThomasLloyd, were announced in October.

Tony Coveney, head of infrastructure asset management at ThomasLloyd, told Financial News: “This is a way of mobilising private capital and shifting the debate from having investment in renewable and sustainable infrastructure in Europe to where it is needed in fast growing markets.”

“If we are serious about a net zero world in 2050, continuing to spend money in the UK will not have an impact on the overall outcome,” he said.

Michael Sieg, chief executive of ThomasLloyd, added: “Most people don’t think about climate as a national issue. The heavy lifting on climate change now has to happen in Asia.”

To contact the author of this story with feedback or news, email David Ricketts

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