The UK Green Investment Bank (GIB) will provide £18m of funding towards a new energy innovation centre for an NHS trust.
The investment in Cambridge University Hospitals NHS Foundation Trust will finance one of the largest projects of this type in the UK and is designed to deliver substantial financial and carbon emissions savings for the organisation.
The total investment required for the project is approximately £36m and is being made in partnership with the Aviva Investors REaLM Infrastructure Fund, which is providing the balance of the investment.
The new energy innovation centre will house a combined heat and power unit, biomass boiler, efficient dual fuel boilers and heat recovery from medical incineration to provide heat and power for the trust’s Addenbrooke’s and Rosie Hospitals.
UK Green Investment Bank chairman Lord Smith of Kelvin said: “Non-domestic energy efficiency is a priority sector for the Green Investment Bank and this deal is an early demonstration of our strategy to partner with co-investors and deliver a commercial return to the bank, whilst reducing carbon emissions in the UK.
“We are delighted to be working with Aviva Investors, Cambridge University Hospitals NHS Foundation Trust and MITIE on this project.”
The centre will reduce the trust’s reliance on the National Grid, saving more than £20m in energy costs over the 25 year operational term of the project and reducing CO2 emissions savings by more than 25,000 tonnes per year.
Business Secretary Vince Cable said: “The UK Green Investment Bank’s £50m commitment to the new Aviva Investors REaLM Energy Centres Fund will help to deliver much needed energy and financial savings for NHS hospitals.
“The non-domestic energy sector has been identified as a strategic priority for the GIB. The size of the NHS estate means there will be huge opportunities to invest further in building energy centres like the one planned for Cambridge University Hospitals NHS Foundation Trust.”
The project is subject to final planning approval but MITIE, the FTSE 250 strategic outsourcing company, was today awarded the contract to develop the energy centre and then operate it throughout the 25 year term.
Ian Berry, fund manager for Infrastructure and Renewable Energy at Aviva Investors, said: “The development of UK energy centres is a very exciting new area for long-term investors such as pension funds. They can achieve stable, diversified and relatively low risk income streams, while also helping to fund important infrastructure projects that deliver long term savings and sustainability benefits to their clients.
“We are delighted to be involved in this development, working with Cambridge University Hospitals NHS Foundation Trust, the UK Green Investment Bank and MITIE to fund, build and operate what is expected to be one of the largest NHS energy centre projects of its kind.”