Guernsey’s banking, investment & insurance know-how provides one- stop shop for cleantech industry

October 26th, 2012 by Christopher Hopson

Tidal waves form during the incoming tide at the entrance to Victoria marina in St Peter Port harbour, Guernsey (click image to expand - ©RLLord)

Guernsey has embarked on a strong push to position itself as a ‘one-stop shop’ to finance clean-energy technologies and renewables projects around the world – particularly for wind and solar.

Fiona Le Poidevin, Chief Executive of Guernsey Finance, which represents the local finance industries, tells Recharge there has been an increase over the past few years in the number of global investment funds using Guernsey as a base, as well as for their administration.

“We have been highly commended by the International Monetary Fund for our high levels of regulatory supervision, which means people can feel comfortable to structure their finance on the Island,”Le Poidevin said.

“We have strong banking, investment and insurance, and a trust and company fiduciary industry. Increasingly these days, we are seeing a big interest in making more sustainable, ethical types of investments.”

“Therefore, I think, we would have access to a lot of investors who would be interested in investing in renewable energy and cleantech,” she said.

She said there are a few renewable projects for which Guernsey Finance is looking at “cradle to grave” insurance programmes that cover inception through to decommissioning.

“That is where we see ourselves differentiating from others. There are a lot of different products we can offer.”

Fiona Le Poidevin said Guernsey Finance is also interested in intellectual property.

Fiona Le Poidevin, Guernsey Finance Chief Executive (click image to expand - image courtesy of Guernsey Finance)

“We have recently modernised our laws in this area and have introduced the normal trademarks, copyrights, patents and so on.”

The private equity industry on the island has been involved in providing financial services for the cleantech sector for several years on a variety of sustainable investments.

“The thought is to make a ‘cluster’ of companies that can finance clean-energy projects internationally, outside the islands,” she said.

“What we would like is to link the entrepreneurs who are creating these new technologies with the fund managers and investors who are interested in these projects.

What comes through in talking to people in the UK and elsewhere is there is often a lack of funding for a project at a crucial stage in the development. Maybe you have some family money and have started an idea, or you have a business angel, but to move on to the next level you need some kind of venture capital, or private equity funding, which what Guernsey specialises in.”

For example, the last few years has seen the launch of a Guernsey incorporated and AIM-exchange-listed investment company called Mytrah, which invests in wind farms in India.

Another company called Crescent Capital has launched a Guernsey-based fund which invests in projects in Turkey.

The island has considerable experience in infrastructure funds – particularly applicable to wind farms and other advanced clean technologies.

“We provide a whole spectrum of funds,” Le Poidevin said.

“Our investment funds industry has around £270 billion [$435 billion] under management and administration but there seems to be more of a gap in the market for venture capital / private equity, where we have seen most growth so that there is around £80 billion [$130 billion] under management and administration.”

“There is a new audience out there in the cleantech world, and we are already seeing a lot of that business coming in, so we think there’s a lot more we can attract. It is really just about building on that and making a specific offering for the cleantech sector.”

“We are already getting a significant number of investment funds, and there are other projects that will be in the pipeline, both in London and worldwide.”

Guernsey has some of the strongest tides and winds in the world, and its proposed energy policy aims for 20% of energy to come from these resources by 2020.

The Guernsey government is at an advanced stage of drafting secondary legislation to allow renewables development.

“Guernsey is an island of about 24 square miles (=62 square kilometres).

We don’t have a lot of landmass, so we are dependent on external sources for energy,” Le Poidevin said.

“Quite a lot of our power is nuclear-generated from France. We are looking to the future, so we need to be as sustainable as we can be.”

The Guernsey government’s renewable-energy team (RET) is looking at the possibility of developing offshore wind. While it might be a more expensive route than onshore, the holiday island simply does not have the space to accommodate a large number of turbines on land.

Alderney Renewable Energy has secured the rights to the seabed off the island of Alderney, where it aims to install tidal turbines.

It recently signed an agreement to develop an interconnector cable between France and the UK, via Alderney.

The RET has entered long-term alliances with three English universities that conduct research into renewables.

It is hoped the universities of Cranfield, Exeter and Plymouth can help Guernsey carry out a first-rate research into tidal-, wave- and wind-power prospects.

Guernsey also wants to create a technical research hub to work closely with students who come to the Island, Le Poidevin said.

Guernsey, Jersey, the UK, Ireland and the Isle of Man have signed a deal to cooperate on exploiting the small islands’ wind and marine resources, and those in the Irish Sea.

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Christopher Hopson is the editor of Recharge. This article was originally published in Recharge on 3 October 2012 and republished on Sustainable Guernsey with permission.

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