Bristol’s wind turbine: A beacon of blended finance success
In this guest article, Ed Rowberry, Chief Executive at Bristol & Bath Regional Capital CIC, talks about the benefits of blending finance for a greener future.
This summer England’s tallest wind turbine went into operation in an area in Bristol where many communities experience inequality. The turbine, which has a maximum capacity of 4.2MW, is now selling energy to the grid which is expected to generate upwards of £100,000 a year for Lawrence Weston. It’s the result of seven years of hard work by the grassroots organisation Ambition Community Energy (ACE).
It’s also a perfect example of how a blended finance approach can result in a change on the ground for communities seeking to address climate change with real local benefits and help Britain reach Net Zero.
Bridging the gap
ACE convincingly made the argument for investment to City Funds, one of the investment funds managed by BBRC. City Funds was launched in 2019 as one of the first of its kind in the UK, bringing together investment, grant, and local authority support in a coordinated place-based approach to tackle key local inequalities and issues. BBRC deployed an investment of £750,000 to ACE, which unlocked a further £150k from Power to Change. Crucially, this in turn provided leverage for £5m further investment from Thrive Renewables, Bristol City Council, private investors, and grant funding from the West of England Combined Authority.
A blend of local private investment and centralised Government finance means a project can often deliver at a lower cost than singular Government interventions. The challenge with the top-down structure of centralised funding is that local communities can often feel less empowered, with change feeling like it is being imposed from above rather than delivered collaboratively. Offering investment directly to local residents gives the project a personal urgency and accountability, as well as transparency.
As the region’s first home-grown, place-based impact investor, we have now brokered and placed more than £50m of investment into best-in-class businesses and projects that deliver both impact and attractive investor returns.
Feedback from the organisations we support shows that our ‘on the ground’ approach, working hand in hand with local knowledge of geography and the challenges faced, is what makes the project a success, both practically and financially in terms of investor returns.
Unlocking the green revolution
A recent report by Sarah Gordon, founding CEO of the Impact Investing Institute and now a visiting professor in practise at the London School of Economics and Political Science (LSE) highlights the potential of blended finance to catalyse private investments in solving climate challenges. She uses Bristol’s City Leap partnership, designed to accelerate green investment, as a prime example.
City Leap is aiming to decarbonise Bristol through a partnership, developed with Ameresco and Vattenfall that will focus initially on the City Council’s own assets and direct around £630m of public and private investment over a five-year period into solar, wind, heat networks and pumps, and other energy efficiency measures.
Sadly, this model is still an outlier in the UK, rather than the norm. We are significantly behind other countries when it comes to blended finance. As the report concludes, we can follow these tried and tested pathways that our international competitors have already created – we just need to do it before we lose the opportunity. We need to see real UK Government buy-in and a commitment to collaborating with private finance to maximise the amount of capital that gets allocated locally to address climate change and other key local issues. A joined-up approach is what will create a truly successful model.