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NATURAL CAPITAL

Natural

SUSTAINABILITY FINANCE, INNOVATION & LEADERSHIP

CAPITAL EDDIE O’CONNOR

THE WIND WIZARD The man at the helm of the world’s most successful independent renewable energy company

By Angela Madden

+ AIB SWITCHES ON €1 BILLION IN NEW LENDING TO ENERGY SECTOR

By Kathleen Barrington VOLUME 1 / ISSUE 1 / DEC 2013 / JAN 2014

IRELAND: A NATION OF 4 MILLION FEEDING 400 MILLION

By Martha Kearns GLEN DIMPLEX HOT STUFF WHEN IT COMES TO ENERGY EFFICIENCY

By Mark Nicholls VOLUME 1 / ISSUE 1 / DEC 2013 / JAN 2014

2013 – THE €3 BILLION YEAR FOR IRELAND'S GREEN ASSET MANAGERS BLACKROCK RENEWABLE POWER KLEINWORT BENSON INVESTORS AMARENCO GAELECTRIC POWER CAPITAL MAINSTREAM RENEWABLE POWER BNRG RENEWABLES

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Meet the Natural CAPITAL Team STEPHEN NOLAN Publisher

ANGELA MADDEN Editor-in-Chief

KATHLEEN BARRINGTON Managing Editor

Stephen is currently Chairman of the Sustainability Gathering and Executive Co-Ordinator of the Green International Financial Services Centre (GIFSC) with responsibility for the positioning of Ireland as the global focal point for ‘green finance’.

His experience spans leadership roles in public policy and private sector in Ireland and across the globe. Posts held include ICT Special Advisor to the Secretary General, Department of Communications, Marine and Natural Resources; Advisor to the United Nations ICT Task Force Board; Founding CEO of the UN-established Global eSchools & Communities Initiative and Executive Assistant to the Chairman and CEO, Rivada Networks. Stephen is also a Board member of the Irish Chamber Orchestra and, in August 2012, Stephen joined the Board of Haven, an organization working to build sustainable communities in Haiti.

Angela is Founder and Managing Director of Tempus Media, a public relations company. She has represented the Irish funds industry for four years and from a standing start has elevated Ireland’s position as a location for funds domiciliation and servicing in the global media and seen assets grow by close to €500 billion. During this time she saw Ireland branded Best Financial Centre for marketing and secured a number of high profile public relations awards. Angela is also Director of Communications for the Green International Financial Services Centre (GIFSC) initiative to position and promote Ireland as a leading centre for environmental finance. She started her career as a journalist with the FT Business Group and subsequently worked as Financial Correspondent, New-York-based America Correspondent, Editor, Group Editor and CEO for a number of leading trade, local, national and international titles, amassing excellent media contacts in Ireland, the UK, Europe and the US.

Kathleen is a Director of public relations company, Tempus Media where she advises clients on reputation management, media relations, public affairs and plain English communication.

Kathleen is a former Special Adviser to Joan Burton TD, Minister for Social Protection and a former Assistant Editor of the Sunday Business Post, Ireland's premier financial, economic and political newspaper. During her 20 years in business journalism, Kathleen was twice Business News Winner at the Smurfit Business Journalism Awards and was also named Business Journalist of the Year at the ESB National Media Awards. Kathleen is a Non-Executive Director of Dublin Bus, the state-owned transport company and Communications Director of Women on Air, a non-profit group which aims to get more women on the airwaves. She was previously a member of the Consultative Consumer Panel of the Financial Regulator.

JOURNALISTS & CONTRIBUTORS DANIEL BROOKSBANK

GRAHAM COOPER

MARTHA KEARNS

Daniel is Editor of Responsible Investor. Focusing on businesscritical news and data, Responsible Investor is the only dedicated news and events service covering responsible investment, ESG and sustainable finance for institutional investors globally. Daniel was News Editor at Investment & Pensions Europe (IPE) from 2002-2007. Formerly he was Multimedia Editor, Europe for Bloomberg News and Economics Editor at IDEAglobal.com. He was the moderator of the European Parliamentary Pension Forum and has appeared on CNBC and the BBC. He started his career at Reuters, initially in investor communications before moving on to edit its online staff newsletter.

Graham is Publisher and a writer for Environmental Finance, a leading global publication covering the impact of environmental issues on the lending, insurance, investment and trading decisions affecting industry. He is a former Editor at Risk Magazine, a publication which focuses on financial risk management news and analysis. Graham has built up a reputation over the years as not only being a successful publisher, but also being a talented writer. He has become an expert on the green economy and has the ability to translate complicated news stories into clear and well thought-out articles.

Martha Kearns is News Editor of The Sunday Business Post, Ireland’s leading financial, economic and political newspaper. She previously held the post of News Features Editor at the same publication.

Martha has worked at The Sunday Business Post for the past six years. She is a former Assistant News Editor of the Irish Independent and spent 12 years working with titles in the Independent Newspapers Group before moving to The Sunday Business Post. Martha holds in degree in journalism from the Dublin Institute of Technology. Her areas of interest include business, agri-business and education. ¸

Natural Capital is published by Tempus Media • Tel: +353 1 818 3301 editorial@naturalcapitalnews.com • sales@naturalcapitalnews.com • www.naturalcapitalnews.com Design, typesetting and print by Brosna Press Creative Design and Print, Ferbane, Co Offaly, Ireland.

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CONTENTS

MARK NICHOLLS Mark Nicholls is a freelance journalist specialising in environmental finance, responsible investment, ESG disclosure, carbon markets and low-carbon business and finance. He has extensive experience as a financial journalist, focusing on environmental markets, responsible investment, and corporate and investor ESG disclosure, but with a background in derivatives and risk management journalism. He also has wide broadcast experience, including on BBC World, CNN, CNBC, American Public Radio and Channel 4. Mark was a member of the judging panel for the European Bank for Reconstruction and Development's Sustainability Awards.

His work has recently appeared in Guardian Sustainable Business, Scientific American, Investment & Pensions Europe (IPE), Energy Risk, Environmental Finance and Responsible Investor and is a regular conference chair/moderator.

GILROY’S DALKIA LEADS THE WAY PAGE 3

MIKE SCOTT

GOVERNMENT AGENCY SOWS SEED FOR SUCCESS PAGE 37

Mike Scott is an expert on climate change and the environment and how they affect business, finance and investment. He has been a regular contributor to several leading publications such as the Financial Times, FTfm, Bloomberg New Energy Finance, Sustainable Business, Flight International, Green Hotelier, Renewable Energy Monitor and Ethical Performance. Mike has developed his reputation on his ability to clearly explain the carbon economy, emissions trading, alternative energy, sustainability, Socially Responsible Investing (SRI), clean technology and Corporate Social Responsibility (CSR).

He is one of the most respected journalists in the field of renewable energy finance.

AIB SWITCHES ON NEW LENDING PAGE 7 IRELAND’S GREEN ASSET MANAGERS WIN €3 BILLION IN NEW FUNDING PAGE 13 GLEN DIMPLEX: HOT STUFF WHEN IT COMES TO RENEWABLES PAGE 27 IRELAND’S GREEN CAPITAL IS ITS PEOPLE PAGE 30

IRELAND AND SOLAR - UNLIKELY BEDFELLOWS PAGE 46 IRELAND’S BNRG BRINGS THE BLING TO CROWD FUNDING PAGE 50 EDDIE O’CONNOR - THE WIND & SOLAR PIONEER PAGE 52 IRELAND - A NATION OF 4 MILLION FEEDING 400 MILLION PAGE 58 NATURAL CAPITAL PEOPLE ON THE MOVE PAGE 67 DCU’S GLOBAL GRAND CHALLENGES PAGE 68 RESPONSIBLE INVESTMENT GOES MAINSTREAM PAGE 75 MIDDLE EASTERN PROMISE PAGE 82 IRELAND ON THE RIGHT TRACK TO SUSTAINABLE FUTURE PAGE 89 IRISH DIASPORA AT CORE OF CHANGING WORLD PAGE 93

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Joe Schmidt, Irish National Rugby Manager pictured with Pat Gilroy, CEO Dalkia Ireland & UK/ Dublin’s former All-Ireland Football winning Manager, pictured together at the Ireland-France Chamber of Commerce Business Lunch, October 2013, Aviva Stadium.

GILROY’S DALKIA LEADS THE WAY Gilroy scores for cleantech as Dalkia moves to Dublin City University’s Innovation Campus writes Kathleen Barrington

he decision by Dalkia’s Chief Executivie Officer (CEO) Pat Gilroy to become the first tenant in Dublin City University’s Innovation Campus strikes another goal in Ireland’s campaign to copperfasten its reputation as a global centre for clean technology.

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department with Dalkia already employing 340 people in Ireland.

The former Gaelic footballer is already a leading player in cleantech with the Irish operation delivering sales of more than €74 million last year. The All-Ireland medalist also scores well in the job creation

Says Gilroy: “We have a very wide definition of sustainability. It is about having a positive impact on the environment, a positive impact on our workforce and a positive impact on our customers.’’ ¸

Dalkia’s core business is working with companies on the sustainable and cost effective management of their energy and utilities.

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Stewarts Care is a charitable foundation which provides care for people with intellectual disabilities. Four years ago, Stewarts signed a 15 year contract with Dalkia for the provision of energy services at its campus in Palmerstown, Dublin.

ABOUT DALKIA Dalkia is the energy services division of French company Veolia Environnement. It is big business: Dalkia has sales of about €9 billion globally, while Veolia has sales of more than €29 billion. (Veolia is separately involved in the operation of Dublin’s Luas tram system).

Dalkia worked with Stewarts and identified and implemented energy efficiency projects to reduce energy demand and to optimise the production of heat and electricity on the foundation’s 1km2 site, which includes more than 30 buildings.

In the first year alone, Stewarts made more than €225,000 in energy cost savings. The first three years of the contract with Dalkia have yielded energy costs savings of over €1.25 million.

The Dalkia team has worked with Stewarts to identify energy savings which, over the life of the contract, will cover the operation, maintenance and financing charges incurred

by Stewarts. Overall, they expect an eight per cent reduction in fossil fuel and electrical energy, average €400,000 annual energy cost savings and average carbon emission savings of over 900 tonnes a year. That is equivalent to taking approximately 230 cars off the road every year.

But it wasn’t just about improving Stewart Care’s bottom line. The award-wining solutions offered by Dalkia also helped Stewarts meet the needs of its customers, some of whom require individually controlled room temperatures due to the nature of their disabilities.

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Dalkia has been in Ireland since 2001 when it bought FP2, a facilities management outsourcing company where Gilroy was chief executive.

At drink-maker Diageo’s Kilkenny plant, Dalkia provided energy efficient lighting which resulted in savings of more than 80 per cent.

That project alone delivered a return on investment of 51 per cent in less than two years. In addition, Dalkia played a key role in assisting Diageo reduce utility costs by 35 per cent.

Dalkia is in the business of energy supply, particularly combined heat and power. It manages over 30 industrial sites in Ireland and has worked on major projects for both domestic and multinational clients based on the island of Ireland including major biopharmaceutical and pharmaceutical manufacturers, food and drinks processors, such as Kerry Foods and Diageo, and banks such as AIB. For example, when AIB was doubling its facility at Ballsbridge from 450,000 to 900,000 square feet, Dalkia set up a new energy centre to provide power, heat, cooling and power back-up.The project saw gas costs reduced by 10 per cent and a 52 per cent reduction in carbon emissions.

At drink-maker Diageo’s Kilkenny plant, Dalkia provided energy efficient lighting which resulted in savings of more than 80 per cent. That project alone delivered a return on investment of 51 per cent in less than two years. In addition, Dalkia played a key role in assisting Diageo reduce utility costs by 35 per cent over a number of years.

The efficiency projects and partnering approach twice won awards from Engineers Ireland. The site asset care approach was in 2012 awarded ‘World class Asset Care’ status by external auditor MCP.

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LEADING THE WAY AT HOME AND ABROAD Pat Gilroy was, in July 2013, appointed CEO of Dalkia’s operations in both the UK and Ireland. “My job is to harness what is best in both countries,’’ he says.

One of the big projects in which Dalkia was involved in the UK was a £65 million cutting edge bioenergy plant for Diageo’s Cameronbridge Distillery in Scotland to which British Prime Minister David Cameron gave his seal of approval on a visit in summer 2013.

The bioenergy plant generates renewable energy from “spent wash’’, a mixture of wheat, malted barley, yeast and water produced during distillation.The spent wash is separated in to liquid and dried solids.The liquid is then converted in to biogas, while the solids form a biomass fuel source.

At the other end of Great Britain, in Dairy Crest’s Davidstow Creamery in the south,

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Dalkia designed and operate a biomass steam plant that uses waste wood as a renewable fuel. This reduces the cheese and whey factory’s carbon emissions by 60 per cent.

This work won the company the 2011 Award for Best Renewable Energy Scheme in the UK’s Green Energy Awards.

It is this reputation for innovation that makes Dalkia such a prize for DCU’s fledgling Innovation Campus. But Gilroy also sees being on the campus as bringing major benefits to Dalkia.

“We want to marry the business with the research potential of DCU. We also want to be with like-minded organisations,’’ he said.

DCU will be hoping that Pat Gilroy and the Dalkia team’s arrival will help drive a new wave of innovation and create opportunities for a new generation of students, just as Gilroy’s time as Manager helped propel the Dublin Senior Gaelic football team to All Ireland success – inspiring a new generation of young GAA players to the game. DCU and Dalkia are already showing all the signs of being a winning team. I

David Cameron visited Diageo's bioenergy plant at Cameronbridge Distillery. The plant was built and is run in partnership with Dalkia.

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AIB

switches on

€1 BILLION in new lending to the

ENERGY SECTOR KATHLEEN BARRINGTON sheds light on Bernard Byrne’s plans for a major new lending programme to the energy sector over the next three years.

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t is no surprise AIB is having a light bulb moment after analysing the scale of the opportunities in the energy sector. AIB Director Bernard Byrne, a former finance director at Ireland’s Electricity Supply Board (ESB), says that energy has been identified as one of the key lending areas on which AIB will now focus.

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The scale of the opportunity is absolutely enormous. Take the domestic wind energy sector, for example. The wind in Ireland blows strongly and consistently – making it one of the top places in the world to construct a wind farm. There is also a very stable government backed scheme that guarantees a floor price for each unit of electricity generated by a wind farm. The pace of construction of wind farms is expected to increase over the next seven years, in particular the build rate in the next two years will reach record levels.

The pace of construction of wind farms is expected to increase over the next seven years, in particular the build rate in the next two years will reach

“The financial requirement for the domestic Irish wind market alone is estimated to be €5 billion,’’ says Byrne.

record levels.

Wind farms are just one part of Ireland’s burgeoning energy sector that also includes energy efficiency and efficient transport.

and renewable energy fund, whose investments includes companies like Nualight, a LED lighting specialist and Airvolution, an onshore wind-farm developer in the UK.

It is a sector that AIB has targeted for major lending growth over the next three years.

Byrne disclosed that AIB is earmarking €1 billion for lending to the energy sector in the three years from 2014 to 2017.

It is no surprise that Byrne has emerged as a sector champion since he joined AIB in 2010. Byrne has the advantage of being familiar with the energy sector following a career at the ESB where he can count among his achievements the establishment of Novusmodus, a €200 million cleantech

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Byrne has brought his combination of financial and energy industry knowledge to AIB which has been seeking to identify suitable sectoral areas for lending growth.

The decision to lend to the energy efficiency sector has required substantial market research to identify clients’ needs and to build the bank’s knowledge of the sector.

For example, the bank commissioned Amarach Research to survey over 450 small and medium enterprises (SMEs) to

understand their requirements. It also held discussions with suppliers and expert partners such as the Sustainable Energy Authority of Ireland, the Irish Green Building Council and Crowley Carbon, the energy efficiency supplier headed by serial entrepreneur Norman Crowley. “The research has been invaluable in educating ourselves on what the market wants and shaping our products,” says Byrne.

The research was published in a report earlier this month, while a number of roadshow events around Energy Efficiency are planned for early 2014.

AIB earlier this month also launched its new Energy Efficiency Finance propositions which are designed for SMEs taking on projects that cut their energy costs.The knockon is that Ireland gets closer to meeting its energy efficiency target of reducing energy consumption by 20 per cent by 2020.

The bank announced, amongst other facilities available, that term loans of up to €300,000 for energy efficiency projects will have a discounted rate. These loans are supported by funding from the European Investment Bank (EIB). AIB also announced hire purchase and lending options to finance the likes of electric vehicles and general equipment. ¸

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Bernard Byrne, Director of Personal, Business & Corporate Banking, AIB.

The idea is to put sector specific financial propositions on the shelf so that businesses are prompted to think about cutting their energy costs and can know what they can avail of when then do decide to take action.

“If we don’t have something on the shelf, the customer won’t recognise AIB is openfor-business for energy efficiency projects when, in fact, we have a strong appetite for lending into this area,’’ says Byrne.

It is said that every cloud has a silver lining.

And it seems that the economic downturn has prompted businesses to focus on energy savings as a way of cutting costs when revenue growth is slow. That in turn should help Ireland achieve its 2020 targets of reducing energy consumption by 20 per cent by 2020.

Businesses seeking to borrow for energy efficiency projects previously found that banks didn’t factor in the savings to be obtained from energy efficiency. However, Byrne says AIB has now put in place a way of taking into account the projected savings from the energy efficiency project when calculating the borrower’s repayment capacity. This is a game-changer in banking terms. When the reduced outlay on energy costs is factored in, the bank finds that the

borrower may well generate the cash flow to pay for the energy efficiency project, whether it is a loan to a large hotel installing a new heating system or a small retailer making repayments on a loan to fund energy efficient lighting.

“We think manufacturing, food and beverage, retail and hospitality will be particularly interested due to their demand for energy and heat,’’ Byrne adds.

AIB is also planning to lend to the renewable energy sector given the government has been set a national target of increasing the share of renewable energy used in Ireland to 20 per cent by 2020. The EIB has provided a €100 million loan to support up to €200 million of renewable energy projects in areas like wind farms, hydro and biomass projects including anaerobic digesters.

“We are only seeing the tip of the iceberg right now in terms of potential.

The challenge is to co-ordinate the market players and surface the potential that’s hidden in businesss across Ireland”

The bank has also signed a memo of understanding with Enercon, the fourth largest wind turbine manufacturer in the world and the market leader in Germany.

Enercon has significant market share in small and medium size wind farms in Ireland. AIB and Enercon will work together to streamline the due diligence process for wind farm projects seeking finance. ¸

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Bernard Byrne, AIB with Ray O’Neill, Head of Energy and Clean Technologies, AIB.

AIB has invested in up-skilling staff to lend to a sector where understanding cash flow is key. Different functions within the Bank have attended wind farm finance training with the Irish Wind Energy Association (IWEA) and already one member of the Energy Sector Team has completed Dublin City University’s Graduate Certificate in Sustainable Energy Finance and is working towards his Masters.

“The idea is that the experts on the Energy Sector Team established in 2013 will prepare materials for the bank’s network of lenders to help them with their lending decisions”, says Ray O’Neill, Head of Energy and Clean Technologies for AIB. O’Neill, who has worked internationally in the renewable and tech sectors sees Ireland as a stable market with great potential to reduce our reliance on imported fuels.

“We are only seeing the tip of the iceberg right now in terms of potential. The challenge is to co-ordinate the market players and surface the potential that’s hidden in business across Ireland.”

The sector team will also serve as a resource to which branches can refer more complex lending proposals. Already, the bank has rolled out detailed manuals for branch staff to familiarise them with the issues on lending to the energy sector.

Like other players in the sustainable sector, AIB is also leading by example and has been recognised for its own internal energy efficiency projects (see panel). It is a case also of learning by doing: “If we are to be useful, we really have to understand the sector,’’ Byrne concludes. I

AIB: Practicing what it preaches on sustainable energy targets AIB is on track to meet its target of a 30 per cent reduction in carbon emissions by 2014.

In the 2012 Carbon Disclosure Project (CDP) AIB was recognised as a Carbon Leader by achieving an overall score in excess of 75 per cent.

In Q3 2014 AIB expects to achieve the ISO 50001 Energy Management Standard - a system of planned continuous improvement in energy management. This will ensure AIB continues to reduce its energy consumption and to use its resources effectively.

In 2014 AIB will be implementing several projects to improve energy efficiency within its building estate.

AIB is on track to meet its target of a 33 per cent reduction in energy consumption by 2020, in accordance with the national objectives laid out in the National Energy Efficiency Action Plan to 2020 (2013).

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By MARTHA KEARNS

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nvestors around the world are looking for new opportunities and sustainable finance looks like it could just be that next big thing. This news could not be better for Ireland, which has already built up a credible reputation as a world leader in the area, which includes investment in the building of physical renewable energy plants on a global scale as well as the managing of environmental assets.

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Blackrock Renewable Power's Charlie Reid, speaking on an Irish green asset management panel at Responsible Investors European Summit, this Summer.

Public private initiative the Green International Financial Services Centre (GIFSC) has big plans for the sector and hopes to increase Ireland-based assets serviced or managed in green funds from US$20 billion today to $200 billion by 2017.

Lofty plans but achievable says Mike Hayes, chairman of the Global Green Asset Management Network, which was launched

by GIFSC last year in New York to try and make these plans a reality.

"Underpinning GIFSC’s goal to become a global leader in green asset management is Ireland’s world-class international financial services centre, one of the best business environments in the world, a wealth of natural resources, innovative green economy

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companies with global networks, a supportive government and an emerging talent pool of green finance specialists,” says Hayes, who is also a partner at KPMG.

SO WHY IS GREEN FINANCE CURRENTLY IN VOGUE? Global investors, including institutional money, pension funds, life assurance money and insurance companies, are looking for alternative asset classes in which to invest.

There are a number of reasons for this - not least the knock-on effects of the global economic crisis. Investors were burned by property, equity, bonds and other investments and are looking for more secure investment opportunities.

They are looking for asset classes that will produce an annual income, are long-term, stable and relatively certain in outlook and are not necessarily correlated to the wider financial market. They also want diversification in their portfolio and there is a genuine interest in 'being green'. Most of these investors are based in regions such as the US, Canada, Germany, the UK, Scandinavia and the Gulf Region.

"They have taken a particular liking to renewable assets that are on the point of being built or which are already built and operating. These assets are underpinned by long-term government support measures in different jurisdictions which have the effect ¸

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of stabilising the cash flow be it for wind or solar projects," says Hayes. "While the returns, which are in the six to nine per cent range, are not hugely exciting, they produce sufficient income for this type of investor, particularly given the very low returns on other financial assets with a similar risk profile."

Because these investors cannot identify these assets themselves, they are investing through green funds and Ireland has emerged globally as the centre of choice for the establishment of these funds.

"The desire to establish green funds in Ireland is driven by a number of factors.The first, and the most important, is the changing regulatory landscape whereby certain institutional investors are obliged - either for internal or external reasons - to invest in a regulated structure. In Europe, Ireland and Luxembourg are the two places that have well-developed regulated structures," says Hayes.

Today Ireland services a record-breaking €3 trillion in its wider funds industry and is the number one hedge fund centre in the world looking after more than 40 per cent of the globe’s assets.

Another reason is that Ireland has a body of professionals who have been working in the industry for the last 20 years and have the necessary knowledge and expertise to support the investment activity of these funds.

"Ireland is punching well above its weight globally in this sector. A number of Irish companies have led the way in developing renewable projects all around the world.

Examples include Mainstream's activities in Chile and South Africa, NTR and Airtricity in the US market, various Irish-headquartered solar companies on the continent of Africa and many different wind and solar companies operating throughout Europe," says Hayes.

This has led to the beginnings of an explosion of green funds in Ireland with many more already in the pipeline in both renewable and the wider sustainability sector. ¸

Damian Foxall, member of Volvo Ocean Race winning team Groupama and An Taoiseach Enda Kenny T.D. pictured at the Volvo Ocean Race, Galway July 2012.

IRISH AMBITION TO INCREASE GREEN ASSETS UNDER MANAGEMENT

The Green International Financial Services Centre (GIFSC) initiative, established by the IFSC Clearing House Group, Department of the Taoiseach has been established to specifically target growth in green assets.

The Irish Government has earmarked the green economy for future growth. Its key policy document underpinning this ambition Delivering Our Green Potential highlights core areas of focus including ‘green’ investment and financing.

Speaking at the inaugural International Sustainability Summit during the Volvo Ocean Race, an Taoiseach Enda Kenny said: “The global economy is transitioning towards a low-carbon, more sustainable model - and this means investment. We want to be at the centre of the financing industry supporting that industry. “

Ireland has a body of professionals who have been working in the industry for the last 20 years and have the necessary knowledge and expertise to support the investment activity of these funds.

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2013 FINANCE WON During 2013, more than €3 billion in international funding was won by Irish firms to invest in global projects. These are being won across private equity, equity investment and enterprise.

One of the big drivers of this is Mainstream Renewable Power, which has close to €2 billion invested in its projects in Chile and South Africa as well as an equity investment of €100 million by Japanese investment bank, Marubeni.

Mainstream, which is focused on the development, construction and operation of generation assets, was founded by Eddie O'Connor in early 2008 following the sale of Airtricity (see full interview with O’Connor on page 52).The company operates in mature markets of onshore wind and solar in the US and Canada as well as emerging markets in South Africa and Chile. In Europe, it is primarily focused on the off-shore wind in the UK and Germany. It is also the company behind the Energy Bridge project in the Irish midlands which hopes to export energy to the UK.The private underground electricity network will, once it gets the sign off, transport electricity from wind farms in Ireland - both on land and at sea - under the Irish seabed and into the UK. During 2013, the company did a large deal with Actis, an emerging markets focused fund manager, for a joint venture on 600 megawatts (MW) of solar and wind projects.

"We develop the assets, we bring them to financial close and then the asset gets transferred into the joint venture. That joint venture, when it fully takes in the 600MW will have invested capital of $1.4 billion at that stage. We have also put our first project into that joint venture: a 33MW wind project, which we put into financial close earlier this year," says Manus O'Donnell, chief executive of Mainstream Capital and Head of Corporate Finance.

Overall, the company has 330MW in construction - €660 million in capital expenditure - and these will be operational next year.

These include one wind project of 138MW and two 50MW solar projects in South Africa. Towards the end of 2013, it also won 360MW of wind projects (worth €666 million) in the latest round in South Africa.

Steven Falci, CIO Kleinwort Benson Investors. Photo courtesy of Silicon Republic

During 2013, more than €3 billion in international funding was won by Irish firms to invest in global projects.

At the corporate level, Mainstream has raised more than €200 million in corporate facilities over the last two years. "We did a €40 million senior debt loan note at end of 2011. In 2012, we did a €60 million corporate mezzanine debt facility of which we have used €40 million. In September, 2013, we did a €100 million equity investment from Marubeni, the Japanese trading house," says O'Donnell.

The company has also submitted into planning process for two projects in its offshore business. One is a 1,200MW joint venture with Siemens and the second is a 450MW wind plant in Scotland, which will cost £1.3 billion capital expenditure.

Mainstream hopes to own the Scottish plant 100 per cent and receive planning by the end of the year.

"When we get planning, we will look to bring in equity and debt consortiums to fund the project through construction. We are looking to stay involved in construction and long-term ownership and asset management of that project," says O'Donnell.

Another major player is Blackrock's Renewable Power, which was founded in 2011. Parent Blackrock is one of the largest fund managers in the world with $4.23 trillion under management in pension funds, insurance companies, sovereign wealth funds and individuals. Blackrock has one of the largest alternative asset management businesses in the world at around $100 billion. Then there is Kleinwort Benson Investors (KBI), a specialist asset management firm founded and based in Dublin with two main strategies: high dividend investing and environmental strategies. It has been managing assets since 1980 and as one of the first providers of environmental equities globally, it has developed a reputation for the company - and indeed Ireland - in that space.

"We are pioneers in environmental investing having been managing renewable energy strategies and water strategies since 2001," says Steven Falci, the company's Head of Strategy Development Sustainable Investment. "We invest in publicly-traded equities, in companies providing solutions to lowcarbon energy and the provision of water.

Over the last five years, we have also been investing in companies providing agricultural solutions."

Falci says KBI launched its water renewable energy strategy not to capture a trend in the market but as a long-term source of investment return. "Getting in early allowed us to get ahead of the curve in terms of our expertise."

At the start of 2013, KBI had €680 million worth of assets under management in its environmental equity strategies. The latest figures show that had grown to €928 million by the end of September. Net flows for the year 2013, to the end of September, was €143 million and the fourth quarter has continued the strong growth.

The company also sub-advises for other relationships around the globe. "We manage the Calvert Global Water Fund in the US. Calvert is one of the leading providers of sustainable funds in the US. We also subadvise funds for OP in Finland and have seen nice flows come through there.We also sell to institutional investors generally pension funds globally," says Falci. ¸

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13.5 cent. France has one of the lowest rates of electricity in Europe, because of the amount of nuclear it has, so in Ireland, you would pay around 17 or 18 cent for the same amount. In Germany, it is as high as 26 cent.

"In onshore wind, in Ireland, you are looking at 7 cent a kilowatt hour is the going rate but you are purchasing that in the high teens."

SOLAR There are many opportunities in the solar field with capital costs coming down massively over the past few years.The cost of solar is put at between €1.2 million and €1.6 million per MW, depending on where you build. As a rule of thumb, solar generates five jobs for every MW installed.

BNRG Renewables is an international renewable energy development company, specialising in developing utility-scale solar PV projects. Based in Dublin, the company has projects under development in seven countries and its work covers all aspects of development including: site assessment, obtaining planning and grid connection rights, construction management and longterm asset management.

"Typically we would develop projects from green field right through to operational asset.

We place those projects with institutional investors, such as pension funds," says Founder Director David Maguire.

The company started business in 2007 in Greece and was also active in Bulgaria and Romania. It went into the UK in 2010 and which now represents its biggest core market.

The company has expanded into the Caribbean Basin, Latin America, west and east Africa and southern European niche markets.

In November 2013, the company started construction on a 20MW project called Sycamore Farm which will be one of the biggest solar parks in the UK. During 2013, the asset value of the constructed projects in the UK alone was €80 million. "New projects in the emerging territories will not be coming on line for another year and we do not know the value of them yet but it would expect to be developing three markets of that scale (or bigger) in around three years," says Maguire.

For more on BNRG see page 50.

John Mullins' company Amarenco might be the "new kids on the block" as he says himself, but Mullins is anything but a novice in the energy field. The former Chief Executive of Bord Gáis (a state-owned energy provider) moved into the solar energy arena, establishing investment fund Amarenco at the International Financial Services Centre (IFSC) in mid 2013.

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Stephen Nolan, Chairman of the Sustainabililty Gathering and Executive Co-Ordinator GIFSC & John Mullins, CEO Amarenco pictured at the June 2013 launch of Amarenco investment fund.

The fund, which is creating a pipeline of solar assets for investment, aims to raise up to €150 million and is focussed initially on France. It also has a UK pipeline but is concentrating on France at the moment, where the projects are supported under French renewable law. The company creates the pipeline, raises the capital to purchase the plants and manages the assets on behalf of the investors.

The maximum size of the plants in France are 12MW and the solar electricity it produces is sold over 20 years, index linked to EDF, which is one of the largest utilities in Europe.

"It is ground mounted in fields, facing south.

The electricity is produced and delivered to EDF at low voltage, distribution voltage so it doesn't need pylons or large transmission lines: it's done at a localised level," said Mullins.

The price of the turbines and equipment has been coming down over the past ten years, leading to a more efficient and cost-effective renewable technology. But the price of electricity generally is going up because of the closure of coal plants. "You have two separate movements in opposite directions but making wind and solar more economically successful.

The technologies have been well-proven.

The power plants are fully insurable and look at the people who have got into this market, like Warren Buffet, who put together a $1 billion bond for solar in the US," says Mullins.You also have plenty of infrastructure funds and pension funds who are investing directly." ¸

The company is in a fund-raising process at the moment and is working on closing out its first transaction, which it is imminent.

"Solar is the number one new form of power in the world. There are more solar farms being built than any other form of technology - ahead of nuclear, hydro, gas, oil or coal.The main solar investment is coming from China, Japan and the US. You are finding now that when it’s windy, for wind energy, and sunny, for solar energy, it is what we call in the industry 'beating grid parity'."

This is also known as socket parity and means that the price of generating the electricity is actually less than what you ultimately pay in the market.

In France, for example, solar energy is being generated at 10.5 to 11 cent a kilowatt hour with the customer paying a minimum of

Ireland's Jim Barry, at the helm of (CIO) Blackrock Renewable Power, believes Ireland has the people with the expertise to understand renewable investment.

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Power Capital’s 2.9 MW and 3.6 MW solar power plant which was recently commissioned in Boizenburg Germany

POWER CAPITAL Power Capital was set up in August 2011 by Peter Duff and Justin Browne and has primarily concentrated since then on the solar market in Germany.

It currently has 8.5MW of solar power under its management in Germany in four separate projects, with its investor make-up primarily high-net worth individuals through to pension funds. The company is now actively looking at the Italian market where it is due to complete a 2.5MW plant.

Co-founder Duff says there is now a big interest in renewable energy.

"People have had a diet of equity bonds and property for a long time and some of them have had a bruising experience from those assets classes and some of those are looking for new asset classes.

People genuinely want to be green as well and if you can give them an economic reason to be green, then it is something they are willing to talk about," says Duff.

People are also looking for diversification, an issue for investors since 2007. "People had believed they were negatively correlated if they held equities and bonds in the one portfolio and if one went up, the other went down. But the problem was that all the asset classes went up and down together. Unlike what we are postulating here - something that will give you a very steady return. It's not designed to give you stellar returns - or bad surprises either," says Duff.

"People genuinely want to be green as well and if you can give them an economic reason to be green, then it is something they are willing to talk about”

Power Capital is offering high single digit returns at the moment. "When you compare that to interest rates and bond yields, that's very attractive. For me, I would take a German solar plant project any day of the week because I believe the sovereign is very solid and the legislative support for it is very strong."

Duff is excited about the company's future and says they are now moving more into development plays.

"I think that's going to be our future.

We see this as part of this industry that excites us most. We want to own the projects outright ourselves, and with joint venture partners – that's the direction we are headed."

The company is looking towards jurisdictions such as Poland, where it is going for a 20MW tender, and South Africa, where it is going for a 75MW tender. Winning these tenders, Duff says, would be a "game-changer" for the company and lead to expansion.

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WIND

Mainstream Renewable Power CEO Eddie O'Connor, in Cape Town, South Africa, with guests at start of the construction of the Jeffreys Bay Wind Farm.

Construction of the wind farm began in January 2013.

OPPORTUNITIES At the end of November 2013, Gaelectric, which develops and operates wind and energy storage projects in Ireland, the US and the UK, announced that it had agreed in excess of €90 million in additional financing for its business. This includes €30 million from BlueBay Ireland Corporate Credit and €56 million from German Landesbank, Nord/LB, to finance the build out of Gaelectric’s 42 MW wind farm at Dunbeg in Co Derry, in Northern Ireland. It also announced that Proventus Capital Partners had increased its existing portfolio finance facility with Gaelectric by €6 million. This followed €65 million in debt finance that was raised earlier this year for the development of its near-term pipeline of 165MW of wind energy projects in Ireland.

"Our progress in 2013 has been rapid, on both the corporate/funding side and on the project development/operations side of our business. This additional funding will allow us maintain the momentum we have created through next year and focus on our project milestones which ultimately create the value for our partners and investors," said Chief Executive Officer Brendan McGrath.

There are 3,400 people employed full-time in the wind sector at present with huge opportunities for growth. ¸

"It is estimated that developing 1MW costs between €1.7 million and €2 million, depending on the site. Taking the average of €1.85 million, there is a pipeline of €4.7 billion there if all of the projects go ahead,"

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MAINSTREAM PLANS NEW FUND TO ACCESS CHEAPER INVESTMENT Mainstream Renewable Power is launching Mainstream Capital in a bid to gain access to capital at better rates writes Angela Madden.

Eddie O’Connor, co-founder and Chief Executive of Mainstream Renewable Power, tells Natural Capital that its size and track record affords it the opportunity o set up its own fund to attract investment. “There is too high a price for private equity,” explains O’Connor who, while acknowledging that access to capital at preconstruction phase is always a tough ask, points out that Mainstream has track-record enough to attract cheaper longterm investment.

Such a move would make a huge difference to the cost of raising finance for the world’s largest independent renewable power

company. “The difference between 25 per cent for private equity and 6 per cent or so from a pension fund,” says O’Connor.

O’Connor also points to the fact that Mainstream is now well regarded and respected as being credible for delivering renewable projects, which should make it more straightforward to attract the interest of the likes of pension funds from the outset.

“We have built up a credible business. When you get this big, there is an exercise in corporate branding in the sense that people know that we know what we’re doing.

“We have a great track record and our projects allow pension funds to take a sensible outlook over a 20 year period.”

Recruitment is already underway with a team leader now in place.

The company’s Head of Corporate Finance Manus O’donnell is Chief Executive of the new venture.

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Over the past few years, progress in delivery and hence financing the wind industry has been slowed down by a number of regulatory issues that have now been resolved.There had also been an issue around the dates of support schemes which has now been extended from 2015 to 2017 and has been a major boost for the sector.

"Those issues have now been put to bed so it means that the level of policy certainty is there which helps the flow of finance," said Kenneth Matthews, Chief Executive of the Irish Wind Energy Association (IWEA).

In 2013, IWEA members installed 250 MW of wind which is around €425 million business done this year. Over the next seven years, it is expected that between €400 to €500 million will be spent on average every year in this sector.

Applications for projects, totalling 3.900MW of wind, have now been accepted by Eirgrid and ESB Networks. First stage payments (which translates into €10,000 per MW) have been put down on 2,800MW, which translates to €28 million.

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"It is estimated that developing 1MW costs between €1.7 million and €2 million, depending on the site. Taking the average of €1.85 million, there is a pipeline of €4.7 billion there if all of the projects go ahead," says Matthews. "These are projects where people have put their money down, have put their skin in the game and said they are going to deliver." For more see page 23.

Matthews says the sector was now seeing that the traditional model of raising debt was being augmented by institutional capital, with big hedge funds now interested in taking either a slice, or all, of a project.

"We have one of the best wind resources in Europe - for once being on the edge of Europe is actually an advantage for us. But there are other EU countries which have retrospectively changed their supports for renewables or are slowing down their progress. This means there are more institutions, banks and hedge funds looking to Ireland as wind is delivered in a very costcompetitive manner for the Irish consumer in fact we have the lowest support scheme in Europe - but we have a stable regulatory environment and that is key." I

"They know they can get a very steady and reasonably comfortable rate of return on their investment for a 15-year period which is government backed so it's a safe place to put their money. It's not a quick buck. And of course, there are risks but you have to manage those risks," says Matthews, who added that Ireland was considered a safe haven for investment.

Galectric's CEO Brendan McGrath 21

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THE €10 BILLION

OPPORTUNITY

By MARTHA KEARNS

he future for renewable energy and green finance in Ireland is looking bright with a pipeline of around €10 billion for the taking.

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The Irish Wind Energy Association (IWEA) estimates that its members will require almost €5 billion in the coming years for domestic projects.

Mainstream Renewable Power alone has a 19,000MW pipeline across the globe, worth around €3.5 billion. In Chile, when it completes the first 600MW in its joint venture, it will have another 2,400MW to develop over the next ten years.

Energy Bridge is a private underground electricity network which will transport electricity from wind farms in Ireland – both on land and sea – under the Irish Seabed and into the UK. It will be entirely independent of Ireland’s existing electricity network.

In South Africa, it is looking to finish off its 238MW in construction next year, start the 360MW that it has just won and will have another 4,000MW of assets in various degrees of development.

“We need to get this inter-governmental agreement signed.We have been waiting for the Energy Bridge project and need to get this sorted out,” says Manus O’Donnell, Chief Executive of Mainstream Capital and Head of Corporate Finance. “We are investing significant amounts of money in that project, taking huge risks with huge regulatory uncertainty around it. There will come a point where we will have to halt progress of these projects because the governments are delaying.” ¸

However, it is being halted at home with work on the Energy Bridge project stalled as the company waits on the two governments to sign an agreement to allow the project to get off the ground.

Pictured above: Kenneth Matthews, CEO Irish Wind Energy Association 23

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Over the next seven years, it is expected that between €400 to €500 million will be spent on average every year in the wind sector.There is currently 2,200MW of wind connected to the Irish energy system.

“We need another 2,200MW in the next seven years. It's taken us 20 years to install 2,000MW and we have to do another 2,000MW in the next seven years so there is going to be a significant uplift,” said Kenneth Matthews, IWEA Chief Executive.

“To install the 2,200MW, we need €3.8 billion - some 20 per cent of that will be associated with labour in Ireland.”

The next three years will be particularly busy in the sector as people want to get projects away before the existing support scheme closes in 2017. “At present there are a lot of project promoters looking for the right kind of finance and the right kind of structure behind the finance to deliver the project,” says Matthews.

In particular, over the next three years, the IWEA feels there is an on-shore investment pipeline of €1.9 billion. Not all of this would be retained in Ireland as some 60 per cent would go towards the cost of building the wind turbines, another 19 per cent would be in labour, eight per cent in network development, six per cent in project advisory, land would be four per cent and transportation would be another two to three per cent.

There is also the export potential to the UK and, in time, France. It is estimated that the upper quantum of export energy that the UK will seek from Ireland in advance of 2020 is 5,000MW, which is roughly the same size of the existing Irish total power system.

“It's a phenomenal opportunity but also a phenomenal challenge. In investment terms, it is worth €15 billion and some 40 per cent of that could be retained in the Irish economy. There are also real opportunities to enterprise the sector through turbine and component manufacturing for these projects and eventually for other markets,” says Matthews.

DECEMBER 2013 / JANUARY WINTER 2014 2013

“It will all flow from the inter-governmental agreement but we need to be able to deliver that agreement quickly - in early 2014. It’s an agreement that must bring certainty for project promoters and developers.There is a momentum behind it but there is a way to go but €15 billion is too good an opportunity to pass up.”

There are also plenty of opportunities in the solar sector as the cost has been on a dramatic downward trajectory over the past few years.

David Maguire of BNRG Renewables said that in 2007, building a plant cost €5.3 million per MW. “I can build that same plant with the same technology for €1.3 million today. Solar has suddenly become very competitive, so much so it has reached and surpassed grid parity in Holland and southern Italy and Spain,” says Maguire. “The solar panels get more efficient every year and it’s a matter of time before it comes into Ireland and people will have solar panels on their roofs.”

Mike Hayes, Chairman of the Global Green Asset Management Network (from GIFSC) and a Partner at KPMG, believes there are significant opportunities for growth and sees the potential for jobs “in the many thousands” in the green finance area alone.

“It will definitely lead to jobs and increased tax revenue and it will enhance Ireland's reputation as a centre of excellence for sustainability in the global market place. We are ahead of the curve in terms of developing projects around the world but there is still potential to be exploited in our home market. This is because the most fascinating aspect of all of this is that Ireland has the potential to produce vast amounts of renewable energy, given our abundant resources of wind, wave and tidal.

“We are ahead of the curve in terms of developing projects around the world but there is still potential to be exploited in our home market.”

“It's been perceived as niche but when people look at the returns and they look at the ability to add a new source of return that may be diversifying other investments they might have, they see the strong benefits of allocating to environmental equities,” says Falci.

“Managers and trustees are always searching for new sources of Alpha. After the environment we've had over the past year or 18 months as the world continues to recover, people are looking to allocate new funds.

People are finding these are long-term sources of Alpha that they are probably not exposed to and have a great chance to enhance their portfolios.” I

Steven Falci, of Kleinwort Benson Investors, believes the industry will attract the investors as it is a growth area and unique.

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Neil Naughton (Deputy Chairman, Glen Dimplex), Martin Naughton (President, Glen Dimplex) and Dick Strawbridge

GLEN DIMPLEX: HOT STUFF WHEN IT COMES TO RENEWABLES Ireland’s Glen Dimplex has unveiled the future of heating and cooling – it’s green and it’s smart writes MARK NICHOLLS.

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LEN DIMPLEX is betting big on renewable technologies. The Dublin-based heating, cooling, ventilation and renewable energy manufacturer has invested some €10 million over the last three years in renewable energy R&D and at the end of last year rolled out its Quantum Energy System – what it describes as a “world first…dynamic heating system” .

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“The group has been in renewable energy for a long time,” explains Neil Stewart, the head of the privately held company’s renewable technology division, noting that it acquired KKW, Siemens’ main electrical heating business, in 1990. But, while it expanded its renewable technology offering into the UK

Today Glen Dimplex boasts annual revenues of more than €2 billion and employs more than 10,000 people all around the world.

Pictured right: Neil Stewart (Managing Director, Dimplex Renewables) Sean O’Driscoll (Chairman and CEO, Glen Dimplex) and Minister Arlene Foster, Department of Enterprise, Trade and Investment, Northern Ireland.

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and Ireland in 2004 and 2005, its real push into the sector came later in the decade.

“In 2009, our Chairman, Sean O’Driscoll, started a process of reviewing our approach to the green agenda and we carried out a fairly robust 12 months of analysis,” he says.

With a range of drivers bearing down on the company’s traditional markets – such as the EU’s ’20-20-20’ carbon reduction, renewable energy and energy efficiency targets – the decision was made to focus on renewables.

“We see it as a major part of the business going forward.”

Less well known perhaps is the global impact of Glen Dimplex and the fact it is one of the world’s most successful business stories – and an alpha example of how money can be made in the transition to a low carbon economy.

In fact, it is the world’s largest manufacturer of electrical heating appliances, and has significant penetration into domestic appliance, cooling, ventilation, and renewable energy solutions markets.

Today Glen Dimplex boasts annual revenues of more than €2 billion and employs more than 10,000 people all around the world.

While Glen Dimplex may not be a household name itself it has, over a couple of decades of regular acquisition, absorbed some well known brands: Roberts, maker of digital radios; Belling, producer the iconic ‘baby Belling’ range of miniature cookers; and ventilation system manufacturer Xpelair among many others.

Within its renewable technology business, it is a leading manufacturer of heat pumps – devices that extract heat from the air, ground or water to provide low-carbon heating. It also manufactures solar photovoltaics and solar water heating systems, heat recovery ventilation and high-efficiency radiators, offering a range of products to both the commercial and residential sectors.

The renewable technology division is still a relatively small part of the business – accounting for around 10 per cent of revenues in the UK, for example. “But we see that growing rapidly,” says Stewart. “We anticipate it becoming every bit as strong as the conventional heating part of the business.”

And research is at the heart of its strategy.

Since 2010 the company has set up three new laboratories focused on the division one in Portadown in the north of Ireland ¸

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specialising in energy storage, specifically for capturing energy generated from renewable sources in the form of heat for both space heating and water heating; another in Dunleer, in county Louth, focused on highefficiency heat pumps, and combining heat pumps with other renewable energy technologies and a third looking at lowcarbon electric and gas heating.

Government support has played an important role Of course, government support for renewable technologies is important for Glen Dimplex’s business in this area, through tax breaks, feed-in tariffs or grants. “We see government intervention as very important to bring the initial scale, not only to help bring down costs of production through economies of scale, but also to help create installation and servicing capacity,” Stewart explains.

However, subsidies are only one part of the story. “There’s no way government can afford to subsidise every single building in the country,” he observes. “On the other side, legislation is also important. Building regulations are becoming increasingly stringent, and are helping to move us to a low-carbon future.”

But Glen Dimplex’s philosophy is very much to develop products that “stand on their own two feet,” says Stewart who points out their products already do just that. “If you look at the lifetime costs of a heat pump compared with its fossil fuel equivalent, taking into account the upfront cost, servicing and fuel costs, renewable energy systems have lower costs.”

But it’s just not that simple. “The difficulty is that they have higher upfront capital costs, and there’s a lack of customer awareness of the new technologies creating a fear factor,” he adds. “So there’s another key challenge, to inform both the consumer and the installation industry, ensuring that there’s training and education available.” I

Aiming to slash heating bills in half Managing ever-greater volumes of intermittent – and often unpredictable – renewable energy capacity is becoming a growing headache for utilities and grid operators. Could the humble storage radiator on your wall help provide part of the solution?

Glen Dimplex certainly thinks so. Its recently launched Quantum Energy System – a storage heater which, as well as being around 25 per cent cheaper to run than equivalent technologies, is designed to allow the utility supplying the electricity to dictate when it powers the heater.

Neil Stewart, Head of Glen Dimplex’s Renewable Energy Division, says “It’s hugely exciting, and we’ve had a tremendous response to the product.”

“It’s about taking the concept of the electrical storage heater and domestic hot water cylinder and making them smart.”

The heaters provide a so-called ‘demand-side response’ to the problem of the variable electricity supply that large amounts of renewable energy capacity tend to bring. They are designed to take advantage of renewable energy generation when it’s available, and to

power down when it’s not, while still providing the heat when the customer needs it.

For its demand-side management (DSM) potential to be fully realised, changes have to be made to how electricity markets work – although these changes are underway with, for example, the UK’s Energy Bill containing provisions to allow payments for DSM. Stewart says that modeling by Glen Dimplex suggests that rewarding the system’s DSM features – combined with its high efficiency – could allow it to deliver 50 per cent cost savings against conventional technologies.

“Combining its energy efficiency and demand-side services could effectively cut heating and hot water bills in half,” he says.

For now, the 30,000-plus Quantum units that have been sold are simply using traditional off-peak tariffs to help bring down bills. But Glen Dimplex is working with partners including Scotland-based utility SSE, E.ON of Germany and the electric utility New Brunswick Power in Canada, to trial its DSM potential.

“We believe the DSM assets like these are going to become increasingly valuable,” says Stewart. “They will help to avoid investments in constructing new power stations, and additional investments in the grid, keeping electricity prices lower in the long term.”

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Ireland’s green capital is its

PEOPLE

ANGELA MADDEN explores how Ireland is ensuring it has the talent in international financial services today needed for the world of tomorrow

Brian McMahon, Manager, Summit Finuas Network, Arlene Allen, Managing Director, BNY Mellon Ireland (PostGraduate course), Deirdre Barnicle, Solicitor, McCann Fitzgerald (PostGraduate course) and Tracey Donnery, Finuas Programme Manager, Skillnets Ltd. 30

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hat is the Summit Finuas Network? Well, it’s Ireland’s play to ensure the professionals working in its International Financial Services Centre (IFSC) remain best in class.

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Essentially, the network has the task of ongoing skills and education development of the IFSC which today employs some 33,000 people.

DECEMBER 2013 / JANUARY 2014

The Summit Finuas Network is the training arm for the IFSC, hosted by IBEC, an organization which represents the interests of business in Ireland.

And now the work of the Network has turned to sustainable finance as Ireland positions itself as a global leader in the space.

Working with international financial services companies, Dublin City University and public/private initiative to grow green assets – the Green International Financial Services Centre (GIFSC), the Network is meeting the challenge of up-skilling experienced executives and recent graduates to take advantage of this growing marketplace.

An Taoiseach (Irish Prime Minister), Enda Kenny, explained: “…to ensure we have the skills required into the future to sustain growth in this market, GIFSC has helped launch a series of new courses in sustainable finance at some of Ireland’s leading universities and set itself the target to up skill some 10 per cent of those already working in international financial services and funds in the next few years alone.”

Skillnets, the government’s enterprise-led training agency, has provided grant funding to accelerate the development of green finance skills, working in partnership with the Network.

GREEN FINANCE The GIFSC initiative is an output of the IFSC Clearing House Group, Department of An Taoiseach. It is tasked with ensuring Ireland offers the optimum environment for green finance to flourish – and ensuring Ireland has the necessary skills to provide the financing solutions as the world transits to a low carbon economy.

The Government's Strategy for the International Financial Services Sector 2011-2016 highlighted the emerging green economy as a key area for growth for the country. It said: “…the most promising opportunities involve the development of Ireland as a centre of excellence in Green Finance, a centre of excellence in the management of carbon and finally the creation of an enabling, coordinated and supportive eco-system to facilitate this development.” ¸

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Pictured at the July 2012 launch of DCU MSC in Sustainable Energy Finance Tracey Donnery, Programme Manager, Skillnets; Paul Harris, Head of Natural Resources Risk Management, Bank of Ireland Global Markets; Barry O'Flynn, Director of Environmental Finance, EY; John Bruton, President IFSC Ireland; and Brendan Bruen, Director, Financial Services Ireland

IFSC – A CLUSTER OF KNOWLEDGE AND INNOVATION Best practice models of knowledge and innovation globally have demonstrated the effectiveness of regional industrial clusters.

The idea behind Ireland’s green finance strategy for talent takes a pragmatic approach with industry professionals and academia working hand in hand to make courses as ‘real world’ as possible and useful in a business environment.

And so this strategic partnership with industry through the GIFSC and the Summit Finuas Network, provides funding and facilitation to build the skills to service the growing green economy into the future.

But, it is not without challenges, explains Brian McMahon, Summit Finuas Network Manager. “When you are creating new courses in a new sector it is always difficult and when you are first in the world to launch third level courses in sustainable energy finance it is not without challenges.

In a way you are trying to educate people in something that there is not actually an exact

“it is always difficult and when you are first in the world to launch third level courses in sustainable energy finance it is not without challenges”

need at the moment. So, we are preparing people for a need which will appear at some point in the future.”

Brian, as Network Manager of the Summit Finuas Network is responsible for all the operational activities of the network such as the procurement of training courses, managing the network finances, facilitating contact between network members and training providers and managing the networks relationships with all stakeholders from members, industry bodies, third level colleges and institutions, independent training providers, Skillnets and other interested parties such as GIFSC.

And while he acknowledges that the road less travelled is not always an easy one to tread: “We will be ready when the market requires our skills in sustainable energy finance.”

However, the move to upskill the financial professionals in the IFSC has been a great success and now in its third year the Dublin City University (DCU) PostGraduate Certificate in Sustainable Energy Finance has close to 50 students in 2013 alone. By June 2014 over 100 professionals will have participated in and successfully completed the course.

What sets this programme apart is the fact it is delivered on a part-time basis to suit busy professionals from a range of international financial services companies and green enterprises, as well as companies that support and enable green finance – legal practices and sustainability consultants.

The course provides a broad and comprehensive overview of sustainability finance topics such as climate change principles and policy responses, sustainable finance risk management and regulations, green technologies and emerging markets, carbon accounting and tax. ¸

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It is unique in its faculty profile as most modules are led by senior company executives with extensive subject matter expertise. Case-studies of Irish companies feature strongly, giving students the opportunity to directly interact with entrepreneurs in the Irish marketplace. This is complemented by leading academics in the field to bring the latest research, models and global context to the programme.

Paul Harris – the Industry Course Codirector has played a leading role in its development. As Head of Natural Resources Risk Management, Bank of Ireland Global Markets and a member of the GIFSC Steering Group, Paul explains: “This course draws together, for the first time anywhere, the key elements of green finance in a comprehensive and practical way enabling the participants to play a central role in the evolution of this marketplace both in Ireland and internationally.” I John Bruton, President IFSC Ireland speaks about the importance of upskilling 10 per cent of the 33,000 people employed in Ireland’s International Financial Services Centre in the sustainable energy finance sector.

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Case studies of professionals who have completed the DCU PostGrad in Sustainable Energy Finance BNY Mellon BNY Mellon is one company which has senior staff members participating in the Post Graduate Certificate Programme.

Joe Duffy, Country Executive for BNY Mellon in Ireland explained: "With environmental issues taking centre stage the GIFSC is giving Ireland the opportunity to develop a centre of excellence in servicing the future green economy. Through its education and skills initiatives we have the opportunity to emerge as a leader in this vibrant area of finance attracting global attention in public and private sectors.

“We are very pleased that BNY Mellon is taking part in the landmark Sustainable Energy Finance Postgrad Certificate in DCU. The development of this type of innovative programme with the Summit Finuas network is a key enabler for financial institutions to fully develop emerging business opportunities armed with this new level of specialist competence for growth."

Wind Prospect Peter Kavanagh is Managing Director of Wind Prospect, described as Ireland’s leading Wind Energy Consultancy.

“We have 28 staff in Ireland and have constructed over 25 per cent of the national installed wind capacity. We currently have 150 MW of wind energy projects in construction and are working on a further 200MW of projects which expect to secure project finance in 2012.

“I completed the course to learn more about the funding environment for green energy projects and how it is evolving. This improved knowledge and understanding will help us expand our services and ensure we stay up to date in the market,” says Peter.

Wind Prospect is part of the Wind Prospect Group, which is active in eight countries – UK, Ireland, France, Poland, Australia, Canada, China, South Africa.

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Irish cleantech companies seeking seed capital have a valuable ally in Enterprise Ireland writes MIKE SCOTT

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lean technology is one of the most promising sectors of the economy but it is one where many companies are start-ups trying to make their way to commercialisation - something that is not easy in an established part of the economy, let alone one so new.

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But Irish companies looking to navigate the complex and ever-changing trade routes of cleantech have a valuable ally – Enterprise Ireland (EI). The government agency helps indigenous companies to export their products and services around the world and is actually the largest early seed investor in cleantech in Europe.

“We work with entrepreneurs and existing companies to help them build their businesses,” says Colm Mac Fhionnlaoich, Manager of Cleantech and Life Sciences at EI. This includes help with everything from innovation and product development to building management teams, reducing internal costs and marketing around the world.

“We expend a considerable amount of resources working one on one helping businesses develop,” he adds. The team also works with universities and colleges to help them commercialise products and technologies and brings together the business and academic world.

Julie Sinnamon, CEO Enterprise Ireland, Owen Keegan, City Manager Dublin City Council, Ronan King, Chairman The Green Way and Dr Brian Motherway, CEO Sustainable Energy Authority of Ireland. Photo courtesy of The Green Way.

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EI works with a number of sectors, including life sciences, electronics, engineering, software, food and internationally traded services, in addition to cleantech, which has only been a focus for the last eight years.

Within the sector, it concentrates on five key areas – renewable energy, energy efficiency, water and wastewater treatment, waste recycling and green build – products and services that go into designing and making energy efficient buildings.

Despite the relatively recent addition of cleantech, the sector is an obvious one for EI to promote, Mac Fhionnaloich says.“Ireland has always promoted a green image around food and in attracting companies into the country. Being green and being efficient are key tenets of what Ireland has to offer, which made cleantech an obvious space to move into.” ¸

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Couple this with the fact that Ireland has more wind, wave and tidal power than it needs for its own economy and the sector looks even more attractive.

The recently-signed Memorandum of Understanding that will enable Ireland to sell renewable energy to the UK is just one example of the opportunities available.

“We are very excited about renewable energy and energy efficiency,” he adds. “This is Ireland using its natural resources to meet a 21st century need that Britain has. It opens up opportunities for companies to offer electricity as a product.

“In energy efficiency there are products and then there is software and services. Ireland has been strong in software for the last 30 years, as well as engineering and electronics.

So when you start to build products with internal intelligence and package that with services, that’s an area in which Ireland has a competitive advantage.”

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While cleantech is at an earlier stage than the other sectors EI deals with, it is able to build on past success in part because there are many crossovers - for example, between life sciences and waste treatment, or semiThe country is able to punch above its weight conductors and renewable energy. “There around the world, believes Mac Fhionnlaoich, is also a natural driver for water treatment in because of its history and its international that we have a number of sectors, such outlook. “The fact that we have emigrated as semiconductors, where clean water is throughout our history means that we look critical,” Mac Fhionnlaoich points out. ¸ outward to the UK, the US, Australia and mainland Europe. We do build on the Irish diaspora – there are 40 million IrishAmericans, for example, so it puts us in a strong position. It opens doors – but business is business and you have to be just as sharp in “This is Ireland using the marketplace as everyone else.

IRELAND HAS GLOBAL REACH

“Our own internal market is tiny so any company that wants to be successful has to start exporting at an early stage of its development. It is a challenge, but it does mean that Irish companies are more commercially-minded.”

its natural resources to meet a 21st century need that Britain has”

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There is a mixture of new, pure-play companies such as Crowley Carbon, which helps other businesses to reduce their energy use, and companies that have branched out into cleantech. Examples include Kingspan, already a major player in energy efficiency building products such as insulation, which has started selling “cutting edge technologies to harvest natural resources; such as rainwater, solar and wind power and reuse them at the point of consumption to create the world’s most cost-effective and sustainable buildings”.

“We have companies that find opportunities worldwide in construction, particularly in water and wastewater,” MacFhionnloch says.

“As these areas have become greener, these companies have decided that being good on the green side is the best way forward.”

EI has 240 cleantech companies on its books, all looking to sell their goods and services abroad, a sign of the growing strength of the sector.

But, EI is not resting easy and is looking for growth in the turnover of the cleantech companies it is helping of between 60 per cent and 80 per cent. “That might sound ambitious, but the opportunities are there and they need to be grasped in the short term in order to be there for the long term,” he points out.

“If you want to be successful, now is the time to be out there, fighting for as much business as possible. I think cleantech has a lot of potential that has yet to be delivered and I think our companies can take a slice.”

HOW EI HELPS COMPANIES Like many government agencies, EI has had to cope with cutbacks, but the amount of money available to help companies has been maintained “because the government believes that export-led growth is critical for the country’s recovery”.

The organisation’s help ranges from funding for Research and Development to developing a business plan. For start-ups with high potential “which we think can grow and really bring significant jobs to the Irish economy”, funding is also available.

Enterprise Ireland hosts numerous training days and conferences for people launching companies in the cleantech sector.

“We can smooth the way for them – but they still have to do the business” And once a product is ready for market, EI’s offices in 30 countries and consultancies in another dozen or so can guide businesses on how best to enter the marketplace, local customs and business practices and put them in touch with potential business partners and customers. “We can smooth the way for them – but they still have to do the business,” Mac Fhionnlaoich says.

EI also helps companies develop their management teams through training.“We have been helping companies for 40-50 years. There is a lot of collective knowledge here.”

BRINGING TOGETHER BUSINESS AND ACADEMIA EI also helps to bring together Irish businesses and its research talent through initiatives such as I2E2 (Innovation for Ireland’s Energy Efficiency) and ICMR, the Irish Centre for Manufacturing Research, both joint ventures with IDA Ireland, the body responsible for attracting investment into the country.

The I2E2 Energy Research Centre was established to facilitate research that will have a direct impact on industry. Its research focus is on energy efficiency improvements in factories, plant, equipment and buildings.

The current research agenda focuses on compressed air systems characterisation, use and solution integration; appropriate work environments and HVAC (heating, ventilation and air conditioning) systems.

The aim is to enable the Irish manufacturing industry to improve its competitiveness via breakthroughs in energy efficiency and cost reduction.

ICMR, meanwhile, is a consortium of leading Irish manufacturers collaborating to conduct embedded research and innovation, again with a view to keeping Ireland’s business competitive and ensuring that it remains the location of choice for advanced manufacturing in Europe.

The two centres, which have been going for three years, receive about €1 million per year each in funding, but direct energy and production cost savings to the member companies have been identified that exceed the government and company investment to date, with a clear roadmap to significant additional similar impacts. The centres have also created three start-up companies that will exploit the technologies developed and member companies have also attracted several million euro of inward investment.

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EI’s cleantech unit focuses on five sectors: Energy Efficiency, Renewable Energy, Water and Wastewater Treatment, Waste and Green Build.

Some of the success stories in each sector are profiled below.

Energy Efficiency NUALIGHT LTD CES ENERGY LTD

CROWLEY CARBON

CES delivers high efficiency on-site generated power, heating and cooling, renewable energy and energy efficient services to business that provides substantial savings while reducing CO2 emission. The company designs, builds, maintain and operate energy centres in Ireland, England, Australia and the Middle East. CES also offers turnkey energy solutions under a Power Purchase Agreement (PPA) whereby it funds the cost of the project by selling the outputs (electricity, heating, cooling, steam, etc) to the customer.

Crowley Carbon is a specialist in energy demand side reduction (DSR), reducing client energy consumption by applying a comprehensive range of energy efficiency technologies. Its solutions, devised from a database of over 1,000 products, are specifically tailored to meet client goals for savings, payback period and CO2 emission reductions. Typical savings of up to 30 per cent are realised and sustainable.

Its products and services include Combined Heat and Power (CHP), Tri-Generation, Biomass CHP, District heating and Wind, as well as a range of energy efficient HVAC products.

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Customers for its end-to-end service include Topaz, Pfizer, TCG, Super Valu and Danoptra. Crowley provides a complete energy usage blueprint of an organization, an extensive catalogue of energy saving products/ devices, a comparison engine to determine the best available savings, project planning and installation and verification that the savings were achieved, as well as allowing clients to “future-proof” their companies.

Nualight is changing how food retailers promote their products in merchandising displays by creating brighter displays while reducing energy costs by up to 60 per cent.

Nualight says it is the only LED lighting company in the world that focuses exclusively on designing light fixtures for food retailers. The company tailors each product to individual retailer needs and its customers include some of the world’s biggest retailers, such as Tesco, Aldi and Walmart, as well as some of the largest OEM manufacturers.

In November Nualight raised €1 million from existing investors including the ESB, Climate Change Capital and Superquinn founder and Irish Senator Feargal Quinn. This was the second fundraising round for the company which earlier in the year raised €2 million. In total the company has raised €12 million since it was founded.

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HDS ENERGY HDS Energy is a leading European designer and manufacturer of industrial boiler plants that allow energy to be generated using wood, bark, rubber tyres, household refuse, straw and other difficult alternative combustibles as well as conventional gas, oil and coal.

Its customers include clothes maker Fruit of the Loom, pharmaceuticals groups Centocor, Wyeth, Pfizer and Schering Plough and chipmaker Intel. In recent years the company has completed energy projects in Portugal, Denmark, Belgium, Morocco and the UK.

Renewable Energy C&F GREEN ENERGY

CLEARPOWER

C&F’s small to medium wind turbines employ technology typically reserved for megawatt scale turbines, enabling them to realise an exceptional energy capture which results in very aggressive payback timescales. Leveraging off its worldwide manufacturing base, C&F is able to offer these turbines at a competitive sales price to farmers, businesses, homeowners, telecom companies, community organisations and public bodies. It currently sells wind turbines of class 6, 11 and 15KW. In the coming months, the company plans to release a 20 and 50KW product.

Clearpower is a bioenergy company that helps commercial, industrial and government clients to cut operating costs and CO2 emissions by replacing fossil fuel heat or power systems with best in class bioenergy solutions and collecting and processing waste organic materials to produce valuable fertilisers and bioenergy fuels.

It currently recycles over 80,000 tonnes of organic material per annum over 10,000 hectares of land, producing organic fertiliser and generating green power for organisations such as BSkyB and the London 2012 Olympic stadium.

OPENHYDRO OpenHydro makes the Open-Centre Turbine, a marine turbine for generating renewable energy from tidal streams. Tidal energy has a key advantage over other forms of renewable energy because the power output is predictable, making tidal energy an obvious replacement for fossil fuelled generation plants.

Unlike other tidal turbines, OpenHydro’s device is situated directly on the seabed, with none of the structure visible from the surface. This eliminates visual intrusion, while the fact that it has only one moving part makes installation, maintenance and operation easier.

The company has been bought by French shipbuilder DCNS, which hopes to be turning over €1 billion a year in the tidal energy sector by 2025. It is currently testing devices in Canada’s Bay of Fundy, which has the largest tidal range in the world and at the European Marine Energy Centre in the Orkney Isles.

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Waste/Waste Recycling

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CYNAR RECYCLING

GREEN BIOFUELS

GREENSTAR

Cynar creates synthetic fuel from waste plastic using a range of techniques including liquefaction, gasification, pyrolysis, catalytic breakdown and distillation to produce a high energy diesel fuel.

The process can handle most waste plastic types that are currently sent to landfill. Its first full-scale plant in Co Laois has an annual throughput of 6,000 tonnes of plastic waste producing approximately 5.7 million litres of synthetic fuel. A second plant is under development in the UK.

Green Biofuels Ireland makes biodiesel. It has the capacity to manufacture 34.5 million litres of biodiesel from any animal or vegetable oil using technology supplied by BDI of Austria, the world leader in multi feedstock technology. The technology can also accommodate next generation feedstocks such as jatropha and algae oils.

Greenstar is the largest and most successful waste management company in Ireland serving 15,000 commercial customers, and over 80,000 households. It is a recycling led organisation recovering over 70 per cent of the waste resource material it handles annually and it produces five per cent of the country’s renewable energy by managing gas emissions from landfills.

It exports all the by-products from the manufacturing process – glycerine is exported to Holland for biogas use, bio heating oil is exported to fuel incinerators and fertiliser powder is exported to France for use in the agricultural trade.

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Green Build

Water BIOTECTOR ANALYTICAL SYSTEMS LTD BioTector’s patented Self-Cleaning Oxidation Technology has overcome the traditional problems associated with online measurement and can reliably measure samples containing salts, fats, oils and greases. The company’s analysers have been installed in over 500 applications worldwide, many of which would have previously been considered unsuitable for online analysis. Its products are used for environmental monitoring, process control and waste minimization by clients such as Dow Chemicals, Shell, BASF and Diageo.

CYLON CONTROLS KILLARNEY PLASTICS Killarney Manufacturing Group makes composite solutions for the construction, automotive, rail, aeronautical and environmental sectors. Through its Silverline Tanks and Tri-Cel Environmental Solutions brands, it makes water tanks and wastewater treatment systems for customers in Ireland, the UK, Middle East & Africa, including Bord Gais Eireann, Dell, Bombardier and Rolls Royce.

Cylon provides energy management solutions to customers to improve energy efficiency, reduce carbon emissions and cut energy costs. The company’s cloud based energy management solution gives energy managers and building owners realtime control of their energy use.

Payback periods of as low as six weeks and energy savings of between 20 per cent and 40 per cent can be achieved, the company says.

MUNSTER JOINERY Munster Joinery is one of the largest makers of energy efficient windows and doors in Europe. Several of its products have achieved Passive House certification because of their thermal efficiency. The company also uses two 2.1MW wind turbines and a CHP plant to cut its carbon emissions during the manufacturing process.

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Ireland and solar

UNLIKELY BEDFELLOWS While the Emerald Isle may be better known for its rain, a number of Irish entrepreneurs are powering ahead using solar writes MIKE SCOTT.

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reland’s renewable energy potential is well-known, but that potential comes mostly from its wind and marine energy resources. Solar power and Ireland do not seem like a natural fit.

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Yet a number of Irish organisations are using the power of the sun to deliver energy and a range of other solutions.

Of course, they are not doing this primarily in Ireland, but in other markets around the world that are not just sunnier, but also offer more support for the technology.

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Both of the companies looking to export wind energy to the UK, Mainstream Renewables and Element Power, have units that develop solar projects, for example.

Mainstream is building projects in Chile and South Africa, while Element has almost 3GW of projects under development in Africa, India, Europe and the Americas.

Another solar project developer, Dublinbased BNRG Renewables, started in 2007 with a number of projects in South Eastern Europe, although its biggest market is currently the UK, where the company has clearly managed to navigate an uncertain policy regime. “BNRG has achieved a 100 per cent success rate on planning determinations in the UK and we continue to develop a large portfolio across the South of England,” says David Maguire, co-founder of the company with Neil Holman.

However, as the cost of solar power continues to fall and eliminates the need for subsidies, within five years Maguire expects its portfolio to be 80 per cent based in Latin America and Africa, compared to 80 per cent in the UK today.

By 2018, even Ireland will see “socket parity”, meaning that generating your own energy from solar panels will be cheaper than buying electricity from the grid. “This will lead to massive business opportunities for Irish companies within the home market.” ¸

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“The EU’s focus for solar research to 2020 is to make photovoltaic solar panels more efficient and cut costs as well as making battery storage of solar energy more robust and cheaper.”

The company is privately-funded, with projects typically funded through construction equity or vendor finance and then sold to institutional investors, although “in some cases we hold projects on our balance sheet and refinance them by issuing debentures to investors in the UK market,” Maguire says.

Some Irish companies using solar technology hesitate to put themselves in that sector.

Solarprint, a company that makes low-light sensors that can replace batteries in wireless sensors, does not really see itself as a solar company even though its products are lightpowered, according to co-founder Roy Horgan. “We are very focused on the semiconductor field,” he says.

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Another company focusing on low-light applications is Surface Power, which offers what it calls “daylight thermal energy technology” (DTES), using solar power to provide hot water, but at much greater efficiency than other systems, it claims.

“What makes this unique is that while it performs well in sunny climates, DTES was designed and optimised for poor European cloudy and wet climate conditions. Daylight can be an all year round opportunity even in poorer climates. This allows it to be used for central heating, electricity production and refrigeration, something not previously considered possible,” the company says.

Altobridge is another company with a solar connection that, having found its niche, has been able to raise money despite the financial crisis. In February, it raised $7.8 million from Intel Capital and the International Finance Corporation, the private sector funding arm of the World Bank. Altobridge provides solar-powered technology that cuts the cost of delivering mobile voice and data across wireless networks, particularly in emerging markets.

The privately-held company, which employs 20 people, has customers in Europe and the US, with interest starting to come through in Asia, too.“We are based in Ireland because that’s where we live,” Horgan says.“When we started (in 2008), there was a lot of seed capital in Ireland but the situation RESEARCH throughout Europe is more difficult now.

However, if you have customers, a There is also a surprising amount of groundcompetitive advantage and barriers to entry, breaking research into solar going on as part you will get funding no matter what.” of the government’s plan to establish Ireland as a leader for innovation in renewable His point was proved last December when energy technologies.

SolarPrint raised €1 million from Kernel Capital and other investors.

Irish research institutions and companies have garnered some €27 million of EU funding since 2006, according to David Pictured (back row): Donal Duffy, Head Macauley of the Sustainable Energy of Enterprise Ireland Relations, Bank of Ireland; John O’Dea, Manager High Authority of Ireland.The EU’s focus for solar Potential Start-Ups, Enterprise Ireland; Rory research to 2020 is to make photovoltaic solar Timlin, General Manager, Solarprint. Front panels more efficient and cut costs as well as Row from Left: Seán Sherlock, TD, Minister of making battery storage of solar energy more State for Research & Innovation, Department robust and cheaper. of Jobs, Enterprise & Innovation and Orla Rimmington, Partner, Kernel Capital.

Among those involved in solar research are the Energy Research Group at University College Dublin (UCD), the Environmental Research Institute at University College Cork (UCC) and the Energy Research Centre at National University of Ireland Galway.

Dublin Institute of Technology (DIT) is involved in a project called Ephocell, which is working on a smart light collecting system to make solar cells more efficient, while the University of Limerick and Tullamore-based R&R Mechanical have worked on a project called MACCSOL (Modular Air Cooled Condensers for Concentrated Solar Power), which seeks to reduce the amount of water needed for cooling in CSP projects, which is a significant barrier to the sector’s development.

DIT is also working with Clontarf-based RED-T and 10 other European organisations in a research programme called PV CROPS (Photovoltaic Cost reduction, Reliability, Operational performance, Prediction and Simulation). RED-T is not obviously a solar power company, being focused on an energy storage technology called flow batteries, which can be recharged and discharged about 10,000 times before they need replacing. However, the technology could be crucial to the expansion of the solar sector because it will allow power to be stored at off-peak times and used when demand is higher, transforming the reliability and therefore the economics of the solar sector.

Other projects Irish researchers are involved in include MOLESOL, which is looking at how to leverage the unique properties of graphene to cut costs and boost the efficiency of solar cells. Solarprint was granted €402,000 to develop research in this area, while UCC’s Tyndall National Institute is working on a nanotechnology-related project called GO-NEXTS that will seek to develop new electrodes based on graphene.

With another major research programme looking into artificial photosynthesis, based at UCD’s Solar Energy Conversion Strategic Research Cluster, having just come to an end, there is little doubt that the country’s lack of sunshine is no barrier to Irish knowhow playing a major part in the global solar revolution. I

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David Maguire, Director BNRG Renewables on site in Puriton, Somerset UK.

IRELAND'S BNRG

BLING TO CROWD-FUNDING BRINGS THE

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The renewable energy operator seeks to raise £8 million from UK investors writes KATHLEEN BARRINGTON. BNRG Managing Director David Maguire is planning to raise the funding through Abundance Generation, the UK crowdfunding platform which allows people invest as little as £5 in UK renewable energy schemes.

Maguire said the investment should give investors a yield of 6 - 7 per cent a year over a period of 30 years. The project will generate about five megawatts of electricity, enough electricity to power 82 homes each year. Maguire is planning to use crowdfunding on a more ambitious scale after Abundance Generation last year helped him raise £385,000 to fund a 250 kilowatt solar energy farm in the UK. The retail investors bought debentures or bonds in Hoo Farm which entitle them to a share of the project’s returns from selling solar produced electricity over the next 24 years.

Maguire said he was very proud of Hoo Farm, which is located at Monkston Road in Kent.

“It represents an excellent example of the high quality of build that BNRG is known for.’’

Traditionally, businesses have turned to the banks and to the investment community to fund new ventures such as Hoo Farm. But the internet has made crowd-funding possible allowing businesses to source funds cheaply from a larger group of people, some of whom may have only very modest sums to invest.

The idea is also attractive to businesses at a time when banks are more than usually riskaverse due to the global credit crunch.

Crowd-funding is a fairly new sector that is still developing. Sometimes, it is used to fund community based projects for charitable purposes, sometimes for purely commercial purposes. Abundance Generation allows investors a chance to invest in green energy projects which are environmentally friendly but from which investors hope to make a return. It is regulated by the Financial Conduct Authority in the UK and the usual warnings apply, namely that these are risky investments which can fall as well as rise.

Nick Holman, Director BNRG Renewables and Louise Wilson, Managing Director Abundance Generation receiving the UK's Solar Power Portal Awards 2013 for the “Most innovative Marketing Campaign”.

“Our expertise is completing projects in a successful manner that makes them suitable investments for institutional investors and pension funds” BNRG Renewables is a solar photovolataic (PV) project development company with headquarters in Dublin. It covers all aspects of development including: site assessment, obtaining planning and grid connection rights, construction management and longterm asset management.

“Our expertise is completing projects in a successful manner that makes them suitable investments for institutional and pension funds,’’ says Maguire.

Starting, in 2007, with solar projects in South Eastern Europe the company has moved on to develop a significant portfolio of projects in the UK. Currently, the UK represents

BNRG’s largest market. More recently BNRG has expanded its activity to selected areas in Western Europe, the Caribbean Basin and Africa, with a growing pipeline of projects in these territories. “In many of the countries solar PV has become a low-cost and secure long-term source of electricity, undercutting oil-produced electricity by a significant margin,’’ Maguire adds.

Maguire, who is an environmental scientist by profession, explained that the power plants themselves are zero carbon emission, helping to lower overall carbon emissions whilst offering investors long term stable and attractive financial yields from projects that are put together with long-term, institutional investors in mind.

“We take the time to really get to know our landowners, local communities, planning authorities, electricity grid operators and investors.We have the highest standards, from the selection of our projects to our preparation of planning applications and our investment return expectations,’’ Maguire continues.

Maguire’s BNRG Renewables is just one among the many Irish renewable companies with global ambitions.

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EDDIE O’CONNOR The Wind and Solar Pioneer ddie O’Connor is a man with a big ambition writes ANGELA MADDEN. “Mainstream was set up to lead the world in the once in a lifetime transition to renewable energy,” he says as he sits in his office surrounded by pictures of the company’s wind farms.

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Fact is that Mainstream Renewable Power, under the guidance of O’Connor, is helping do just that – capturing the elements to power the globe’s insatiable desire for energy in clean, new technologies.

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Mainstream, which emerged from the sale of O’Connor’s former renewables company, the well-known brand Airtricity, is now one of the world’s largest, independent renewables companies.

It has mastered the art of planning large infrastructure projects - making them work and attracting investors which is no mean feat given the difficulties normally associated with attracting funding at the start-up phase of a project. This was further compounded by the fact that the company was set up at the beginning of the global recession.

The success of Mainstream and its many recent wins including its recent deal to sell its 46 megawatt Oldman 2 Wind Farm, located in Alberta Canada, to IKEA, the world’s largest furniture retailer, is well documented. But what is it that makes its leader tick?

Well, for one thing, it’s not money. “I have more money than I need. I had more money than I needed when I sold Airtricity and I reinvested most of it back into Mainstream.

Money does not motivate me, I have little need for it and I want for nothing.”

And, as a natural extension, worldly goods do not motivate O’Connor. He is not a materialist. “I own one house. I have a nice car, a good strong car, an Audi A8 - but nothing flashy.”

So, you may ask what is it that drives O’Connor? “This is it [Mainstream]; this is my labour of love,” he says.

But he also has a genuine desire to make a change in the world. “We are going to help free the world of fossil fuel. And that’s a very noble target.”

Somehow you have no reason to disbelieve that he will do just that. ¸

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In psychological terms, he sees himself as a “change agent” – someone who starts at 1 and finds a way to go straight to 20. In essence this kind of person sees the endgame and finds a direct way to get there.

Yet, it was no easy ride for O’Connor who shares that he had a very tough teenage period, probably even suffering from depression – or at least thinking he was. He says he was certainly exhibiting all the signs of depression, was very unsure of himself and lacking in confidence He only realised how he felt was normal on reading GaIl Sheehy’s novel Passages. Suddenly it all made sense.

“It was just one of life’s passages,” he says.

“And we have many passages throughout our lives.”

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“It was a very strict place, a form of communist bureaucracy,” he recounts.

“There was one guy there who thought the Soviet Union was Heaven on earth and saw the State as provider of jobs.

“Then I realised, very quickly, that this was the perfect job for yours truly being a change agent.

And in the first few months I was there energy prices fell 70 per cent.” ¸

And it wasn’t until he went to university in University College Dublin (UCD) that he really felt at home. “I experienced complete freedom at UCD; it was fantastic for me. I was in a chemical engineering course with 15 guys who were very united, very brilliant close people.”

O’Connor modestly excuses himself from this aforesaid description before continuing: “There was Tony Mullen, Pat Kenny, Gerry Fahy, Brendan Lyons – all extraordinarily gifted but it wasn’t just their intelligence, it was the camaraderie.

There was no competition, no tension.

That was a great time – particularly having come through a very difficult teenage period when the hormones kicked in!”

His teenage years were not to be the only period of consternation in his life though.

Asked was it necessary to face a few challenges or attacks along the way in order to be successful, he replied: “That’s very astute actually. I do think you need some form of external motivation from time to time.”

Not surprisingly, his time at Bord na Mona, the state owned peat development company, was singled out for special attention. “I was 37 when I was Manager of Fuel Processes at the state electricity company ESB. A job came up at Bord na Móna at the age of 39 and I got that as I was just turning 40.”

This period in O’Connor’s life is well known and one which still sets ears tingling.

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IKEA Ireland invests in new Irish wind farm in Co Leitrim, Ireland.

Eddie O'Connor, CEO Mainstream Renewable Power, Joanna Yarrow, Head of Sustainability IKEA Ireland and UK, David Gascon, Head of Electricity, Vayu.

The stage was set and change was on the way. O’Connor did what had never been done before - rather than ignoring the unions he engaged with them. “No-one at CEO level had ever engaged with them before.” Whatever he did worked as despite the fact there had been strikes aplenty in previous years, O’Connor managed to secure change without encountering a single one. In the process he created a new culture of entrepreneurship which was hugely transformational at the time. At the heart of this was the Employee Enterprise Scheme which paid employees by the ton instead of by the hour. Rewarding employees for what they produced rather than the hours they worked was a massive breakthrough and had far-reaching results on the company and for the employees.

His vision for the future – one free from fossil fuels and his role in helping the world achieve that goal is as steadfast now as it ever was and he believes that there is no longer any room for disbelievers when it comes to the effects of global warming and the impact of fossil fuels on the planet.

“There is no change for the sake of change now.The facts are there for everyone to see.”

He puts this down, in part, to the fact that there is an ever increasing plethora of educated scientists with PhDs. “One hundred years ago there was maybe 1,000 people with PhDs and now there is probably more like 10 million.

“And, as a result, science and the world we live in is changing ever more rapidly. Let’s start off with the turntable, that stayed around for about O’Connor puts his success down to the 50 years.Then came reel to reel tape and then three rules of Transformational Leadership. the tape, then the cassette tape and then new “Firstly it’s about removing all hope, ways to press the data.That basically lasted for secondly, when you’ve cut away the tree to 20 years. Then came the CD Rom that was the roots you paint a brand new vision for around for 15 years and now no-one is using the future.Then the third rule is embedding this equipment.There followed the dongle, the that vision in into the operations of the app.Think about all that change in IT and how company.” change is coming faster and faster.

“The world population has gone from 1 billion to 7 billion in 100 years and we are still feeding people – or at least more of them - and with new developments will come further longevity and greater spikes in population.” Ultimately he believes that if the world does not make the move quickly away from fossil fuels “mankind is facing extinction.”

O’Connor is impatient with those who refuse to see this reality: “It doesn’t matter whether we believe it or not, the fact is the earth is round. Belief has nothing to do with it.” ¸

Ultimately he believes that if the world does not make the move quickly away from fossil fuels “mankind is facing extinction”

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O’Connor has some interesting insights when asked about those who do not want to live beside turbines – or at least are presented as not wanting to. He believes the media has created an unbalanced view of this situation. “The media will always gravitate towards the crying woman at the foot of the turbine and as far as I can see it is usually the same crying woman.

“The NIMBY [Not In My Back Yard] movement is now a global one in part due to the rise of social media – someone can make a comment in Asia which is read in Dublin during the day before making its way to Timbuktu.”

O’Connor has a name for this global mobilization of NIMBYs. “There are no longer NIMBYs but GNIMBYs – Global Not In My Back Yards,” he explains. He points out that Dublin Airport would never be allowed to be built today because there would be so many complaints about noise leaving Ireland a backwater and inaccessible.

He also said: “When Brunel designed his first tunnel, reports were that when you went into the tunnel you would go deaf. Of course that was ridiculous and Brunel went ahead and built his tunnel anyway – which we all benefit from now.”

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going to be a big change. Multi-trillion of euros need to be spent in order to do that.

And, we need a decent price for carbon.”

O’Connor has high hopes that Cap21 in Paris will do something about these issues and create policy which will result in dramatic results.

And, if he wasn’t with Mainstream? “I could spend all my life fishing; I could spend long days playing golf and I like travelling and visiting places,” says O’Connor before revealing he is also a dab hand in the kitchen preparing Heston Blumenthal’s chicken thighs in sherry and onions the night before.

“You really should try it. It is wonderful.”

But not one to follow the rules, or in this case the recipe exactly, O’Connor refuses to discard the vegetables once the stock has been prepared. “I put them aside for later.”

Somehow you get the feeling that O’Connor - who believes we will settle on the moon (but not until we save the planet) - won’t be hanging up the boots any time soon. He is certainly a visionary and a visionary who exacts change. O’Connor is at the forefront of leading us all into a Brave New World. I

“This year I insisted on our team going around the midlands and knocking on every single door of every home within one kilometer of a proposed wind farm and this is a full two years before submitting a planning application.”

O’Connor believes it is important to engage properly with local communities who are host to the wind farms. Pictured here in Co Offaly, in the midlands of Ireland, a region earmarked for major development.

However, O’Connor is very big advocate of engaging properly with the communities who host wind farms and listening to what they have to say. “Absolute respect for the communities we are working in is very important to us. This year I insisted on our team going around the midlands and knocking on every single door of every home within one kilometer of a proposed wind farm and this is a full two years before submitting a planning application. It involved almost two and a half thousand homes and it took us five months. People were very appreciative and they see we are not a faceless developer. It is so important to listen to what people are saying because they’re the communities hosting it.”

But O’Connor remains positive that the world can make the transition to renewables.

“By 2050 we will meet the world’s electricity needs without the need for fossil fuel. I don’t care what percentage of it is nuclear, it is going to be small as well as expensive – inordinately expensive. That is

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As the global population soars to record highs MARTHA KEARNS looks at how Ireland is feeding the world and is on a mission to become a world leader in sustainably produced food.

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RONAN’S piercing blue eyes stare out at the viewers, imploring them to engage in the idea of sustainability and the unique opportunity it gives Ireland to become a world leader in sustainably-produced food and drink. “Our country,” she says, “was not handed down to us by our parents but is merely on loan to us by our children and we have to ensure we return it to them as bountiful as when we received it.” This, she says, is what sustainability is all about.

S

AOIRSE

Saoirse Ronan, who is making a name for herself in Hollywood in lead roles of films such as Atonement, advertises Origin Green, a programme to help Ireland become a leader in sustainable food production.

DECEMBER 2013 / JANUARY 2014

The young Irish actor is appearing in a magnificently shot four-minute long advertisement film for a new movement called Origin Green. Spearheaded by Bord Bia, the Irish Food Board, Origin Green is a unique programme which aims to help Ireland become a world leader in sustainable highquality food and drink production. It is built upon the Origin Green Sustainability Charter which will commit participants to engage directly with the challenges of sustainability. This will include reducing energy inputs, minimizing overall carbon footprint and lessening impact on the environment in order to increase efficiency and competitiveness.

In a world that is using up its resources at one and a half times the rate that the planet can sustain, sustainability is where the Irish agri-food sector is headed in order to get itself even more noticed on the world stage.

And we are already well on our way. European Commission research shows that Ireland’s dairy industry already has the lowest carbon footprint in Europe and its beef industry, which is the largest net exporter in the Northern hemisphere, has one of the lowest.

Since 2011, the rollout of Bord Bia’s Origin Green carbon footprint monitoring for all of its quality assured beef farms, has further enhanced Ireland’s beef production carbon efficiency profile at international level.

The world needs to produce 70 per cent more food over the next four decades in order to meet its growing population, but at the same time it needs to reduce its greenhouse gas emissions.

Sustainability has become a major issue for the global food industry and Ireland – and its food producers – are hoping to build up the country's green credentials to become a world leader in this area. Ireland has already shown itself to be a world leader in the agrifood business and, as a nation of four million people, is worldwide feeding up to 400 million every year. But the world population is set to increase to 9 billion by 2050.This is both a challenge and an opportunity for the sector.

The world needs to produce 70 per cent more food over the next four decades in order to meet its growing population, but at the same time it needs to reduce its greenhouse gas emissions. “It is this dilemma that the world needs to solve,” says Aidan Cotter, Chief Executive Officer of Bord Bia, who said that Ireland was in an unique position in terms of its natural sustainability to take on this role. “It is as if the concept of sustainability was created for us,” says Cotter.

“We believe we can be a world leader in sustainability. It is what we can, and should be, famous for. But certain conditions must be met.” ¸

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The Irish elements – rain, wind, mild conditions and plentiful seas - have always been advantageous towards Ireland becoming a world leader in the agri-food business

One of the conditions set by Bord Bia is that every farm and food-producing industry in Ireland signs up to the sustainability agenda.

Bord Bia has set a goal that by 2014, 75 per cent of all of food and drink exports should be sourced from farms and food businesses that are “on the road to sustainability”. By 2016, the food board wants this figure to be at 100 per cent. So far, 257 companies have signed up for the Origin Green program, which includes signing up to a five-year programme which will see targets verified by an independent third-party.

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As part of Origin Green, some 30,000 beef farms have already been carbon-footprinted and by early next year, a similar programme will be rolled out across all 18,000 dairy businesses. No other country is carrying out carbon footprinting on this scale. It is being carried out in conjunction with Teagasc and is being conducted to the highest international standards, based on carbon footprint calculation models accredited by the Carbon Trust. Plans are also in place to introduce such measures around biodivesity and water. And in a world that is facing water shortages, with agriculture requiring the use of 70 per cent of freshwater supplies for irrigation, our water stress index, is among the lowest in the world.

Even before sustainability became a buzz word, the Irish elements – rain, wind, mild conditions and plentiful seas - have always been advantageous towards Ireland becoming a world leader in the agri-food business.The importance of the sector to Ireland can not be underestimated. It is one of the country's most important indigenous industries, providing 7.7 per cent of the country’s employment as well as providing the primary outlet for the produce of 128,000 family farms.

When employment in inputs, processing and marketing is included, the agri-food sector accounts for almost 10 per cent of employment. ¸

IRISH COMPANIES WORKING IN THE AGRI-FOOD AND FOOD INGREDIENTS INDUSTRIES PUNCH ABOVE THEIR WEIGHT ON A GLOBAL SCALE.

Kerry Group Founded: 1972 Headquarters: Tralee, Co Kerry Employs: 24,000 people Sales: €5.8 billion Kerry Group is one of the world leaders in food ingredients and flavours serving the food and drink industry. It was set up in Listowel, Co Kerry in 1972 with the commissioning of its first dairy and ingredients plant. Now, the company, which is headquartered in Tralee, Co Kerry, has current annualised sales of around €5.8 billion and employs more than 24,000 people around the world.

Its employees work in its manufacturing facilities in 24 countries worldwide and international sales and representation offices in 20 other countries. An important growing part of the business is its global technology and innovation centres, one of which is to open in Naas, Co. Kildare, Ireland in two years time. The new €100 million facility will employ 950 people. Kerry Group currently employs 4,000 people in Ireland. It employs 15,000 people in the EMEA region, 6,000 in the Americas and 3,000 in Asia Pacific region.

The company supplies more than 15,000 food, food ingredients and flavour products to customers in more than 140 countries.

Launched as a public company in 1986, Kerry Group plc is listed on the Dublin and London stock markets and has a current market capitalisation in excess of €7 billlion.

Some of Kerry Group's brands include: Denny, Galtee, Roscrea, Shaws, Ballyfree, Cheestrings. Charleville, Mitchelstown, LowLow, Dairygold, Wall's and Mattessons.

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The Irish Dairy Board

The Department of Agriculture, Food and the Marine calculates that the sector contributes €24 billion to the national economy and generates 6.3 per cent of gross value added. It accounts for half of purchased Irish goods and services by the manufacturing industry and just over half of exports by indigenous manufacturing industries. It exports €9 billion to more than 160 countries around the world and accounts for around 32 per cent of Net Foreign Earnings from exports.

The Irish Government’s Minister for Agriculture Food and the Marine, Simon Coveney, says that the Irish government's commitment to the agri-food sector remains strong.

In the supplementary estimate for 2012, the Exchequer provided €1.339 billion for agriculture for agriculture, fisheries. Food and public expenditure will amount to over €2.639 billion when the department's spending is combined with EU funding of €1.3 billion.“The high proportion of expenditure on local raw material and services as well as the dispersed nature and composition of the sector will ensure that the agrifood sector will play an integral part in the recovery of our economic success and the continued viability of rural and coastal areas,” according to the department.

Speaking recently at the opening of an international conference at University College Dublin (UCD), Minister of State at the Department of Agriculture, Food and the Marine, Tom Hayes emphasized the importance of a strong, sustainable Irish agriculture sector. “Ireland continues to build on the strengths of its green image and is deeply committed to maintain sound agricultural practices. Our aim is to maximize the food production strengths that are intrinsic to the Irish agri-food sector, particularly our environmentally friendly grass based production system.”

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Founded: 1961 Headquartered: Dublin Employs: 3,700 Sales: €2 billion

Exports in the sector are expected to grow by 40 per cent over the next decade as a result of opportunities arising from increased global demand and the end of the EU milk quota restrictions

EXPORTS & EMERGING MARKETS Ireland's small domestic market has meant that Irish food and drink companies have always had to export. The food and drink sector is the traditional backbone of Irish exports and accounts for around half of all exports from indigenous companies. In contrast to most other sectors – including pharmaceutical, chemical and ICT – Irishowned companies are more dominant than foreign multinationals. Exports in the sector are expected to grow by 40 per cent over the next decade as a result of opportunities arising from increased global demand and the end of the EU milk quota restrictions in 2015. Banks are reported to be putting aside large funds to support Irish dairy farmers when the restrictions are lifted and are already lending for capital programmes in advance of the ending of the milk quota.

The Irish Dairy Board (IDB) is the country's largest exporter of dairy products and exports to more than 80 countries. It was established in 1961 by an Act of the Oireachtas and is a cooperative enterprise. It is owned by Irish dairy processing co-operatives and dairy companies and, through them, by Irish dairy farmers. Now the company, which is headquartered in Dublin, employs more than 3,700 people across the world. It has organised its business across three platforms – consumer goods, dairy trading and ingredients and DPI, a speciality food distribution company in the US. Its 2012 annual report reported turnover of €2,028 billion.

Some of IDB's brands include Kerrygold, Dubliner, Pilgrims Choice, MU and Beo. Kerrygold is sold in 50 international markets and is in the top three brands in 27 of those. It is the number one imported butter into Germany and the US. Pilgrims Choice is the number two retail cheese brand in Britain.

Recent political progress has also been of benefit to the sector. As well as progress on a new reformed Common Fisheries Policy, major reform of the Common Agricultural Policy (CAP) deal, including the greening of CAP, which was reached in Europe in June, was a big coup for Ireland before the conclusion of its Presidency of the EU. Minister Coveney said he believed it secured the sustainable development of the sector to 2020 and beyond. ¸

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Ireland is now the largest net exporter of dairy ingredients, beef and lamb in Europe. It is also the largest exporter in Europe of powdered baby formula.

In 2012, the value of Irish food and drink exports increased by almost two per cent to exceed €9 billion for the first time, with meat and seafood being the strongest performers. This was an impressive performance against the backdrop of an eight per cent easing in global commodity prices, lower output in some key sectors and the public's appetite for cheaper food.

Export revenues have increased by €2 billion over the three year period to 2012.

The UK is the largest market for Irish food and drink exports, accounting for 42 per cent in 2012. In the same year, 31 per cent of exports went to Continental EU countries while 27 per cent went to international markets. The main drivers in trade to the UK – which increased by five per cent, or almost €170 million to reach €3.8 billion last year – were beef, seafood and dairy. But the emphasis on value-added food products has led to growing markets in other EU and in third world countries.The figures back up this growth with trade in international markets – led by Asia, Africa and North America - increasing by eight per cent or €200 million to exceed €2.4 billion. Ireland is now the largest net exporter of dairy ingredients, beef and lamb in Europe. It is also the largest exporter in Europe of powdered baby formula.

Irish agri-food businesses are very conscious of the need to expand their markets and the potential of emerging markets is certainly there. The increasing world population – along with a growing middle class in large countries such as China and India – will mean that by 2030, there will be a 50 per cent increase in demand for food production. During 2011, trade to China increased by 47 per cent and to Russia by 30 per cent.While China is often cited as the main growing market, there is increased interest in Africa. This is because some analysts believe that there is a faster pace of growth in Africa. Trade to South Africa increased in 2011 by 43 per cent and to Nigeria by 38 per cent. Ireland is poised to take advantage of these opportunities, whether they be in China, India or Africa.

This is where it all comes back to sustainability. If Ireland can become a global leader in this area, it will give the country – and its agri-food businesses - a head start and a unique selling point in these emerging markets. “Becoming a world leader in sustainability is a bold ambition but it can be realized,” says Saoirse Ronan in the Origin Green advertisement. “We need to show the world we are on that journey and we need to show them proof that we can partake of the world without taking from the world.”

Glanbia Plc Founded: 1997 Headquartered: Kilkenny Employs: 4,900 Sales: €3 billion Glanbia is an international nutritional solutions and cheese group and was formed in 1997 with the merger of Avonmore Foods plc and Waterfood Foods plc. It was originally called Avonmore Waterford Group (AWG) but changed its name in 1999 to Glanbia. It is listed on both the Irish and the London stock exchanges and employs more than 4,900 people worldwide – with approximately 1,800 Irish-based employees and more than 2,000 in the US. Headquartered in Kikenny, Glanbia has a direct presence in 17 countries and its products are distributed in 130 countries. Its annual report for 2012 shows that it had pro-forma total group revenue of €3 billion.

Glanbia is the number one global marketer of whey protein and owns the performance nutrition brands Optimum Nutrition, BSN and ABB. Another growth core is Glanbia's business-to-business global ingredients focus. It is the largest global manufacturer of American-style cheese and the number two global premix solutions provider.

Its UK plant is the largest manufacturer of mozzarella cheese.

Glanbia Ingredients Ireland Ltd (a joint venture between Glanbia plc and Glanbia Co-Op) is Ireland's biggest dairy procesor and the third biggest exporter. It is gearing up for an increase in milk production after the milk quota restrictions are lifted and is investing €150 million in the new Belview facility in Co Kilkenny.

Glanbia's Irish brands include Avonmore, Kilmeaden, Premier Milk, Snowcream and the CMP milk brand.

Avonmore is the number one brand in the Irish grocery market.

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Dr Pearce Lyons, the Dundalk-man at the helm of Alltech

GENE CHIP GENIUS ne Irishman is taking on an enormous challenge in his bid to feed the world – and provide the safest food chain possible.

O

Dr Pearce Lyons, the Dundalk-man at the helm of Alltech, a global leader in the animal health and nutrition industry, is pushing the boundaries with his 'gene chip' The company is breaking new ground in the field of animal nutrition with its cuttingedge technology. Using DNA microarray or 'gene chip' technology, scientists can determine how nutrients act on gene expression.

“The gene chip is almost like a laboratory on a card,” says Dr Lyons. “In the past, we have had to do many studies on animals to see what is really happening. We were measuring one thing. The reduction of

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Dr Pearce Lyons, the Dundalk-man at the helm of Kentucky-based Alltech, a global leader in the animal health and nutrition industry, is pushing the boundaries with his 'gene chip' diseases in humans has always been one dimensional, and this meant many steps and many animals but the gene chip helps with this.

“With the gene chip, we can do many experiments at the same time. As a biochemist who is switched on by all the exciting things we learned at UCD the gene chip has reignited that excitement, that passion,” says Lyons.

Alltech, which is headquartered in Lexington, Kentucky, was founded by Lyons with just $10,000 more than 30 years ago. It now employs more than 3,000 people and is trading in 128 countries. Its sales have passed the $1 billion mark and is expected to reach $4 billion in the next three years. The company is still acquiring businesses across the US. The company has three research centers – one in Kentucky, one in South Dakota and one in Dunboyne, Co Meath, Ireland. The Irish plant is its European Bioscience Centre and focuses on crop sciences and life sciences. Lyons says it “has always been key”. ¸

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The possible advances that could be made through the 'gene chip' are immeasurable but, according to Lyons, for Alltech, it would be “a game changer as we take our primacy in science to a whole new level”.

Lyons studied biochemistry at University College Dublin before going to Birmingham to do a masters in brewing technology and a PhD in yeast biochemistry. He began his career in Irish Distillers where he built up a distillery for them in Midleton but Lyons felt he was in a "technological pigeon hole" and went to England to travel around breweries troubleshooting. He then moved onto the US where he started working with fuel alcohol in the renewable energy sector.

Part of his job was to visit farms in Iowa and there he took an interest in the feeding methods and it led to the creation of Alltech.

Nutrigenomics is at the heart of Alltech. It might sound complicated but, in effect, it studies the effect of nutrition on gene expression. It is the focus of Alltech's team of researchers at its Center for Animal Nutrigenomics and Applied Animal Nutrition the first facility of its kind. It has produced exciting developments in the area and its cutting-edge technology has enabled Alltech's scientists make significant strides. The 'gene chip' is the latest advance in this field.

“India has 180 million hectares of land. It has 1.2 billion people. With Nutrigenomics, we can understand what is happening at the plant level by up to two tons per hectare, 360 million ton, which is as much as the corn that is produced in Iowa. The corn is richer in starch and richer in protein.We have done the same thing in Ireland with a group called Comex,” says Lyons.

The gene chip also has potential to improve the health of the human population. “There are four or five major diseases, and these can be helped with the gene chip,” says Lyons.

“We can use the gene chip in places like Kenya, where they have HIV.We can look at microRNA (a molecule found in plants and animals) and see what to do different.We can look to see if they elevated like a dimmer switch that could be turned on and off.”

Alltech says its ultimate goal is to provide “the safest food chain possible”. The world's population has grown from 1.6 billion to 6.1 billion during the 20th Century. By 2050, the population of the world will surpass 9.3 billion people.

“This population has been supported by our global food network, a complex system that allows food from all around the world to arrive where and when it is needed.

However, there are many threats to this system, and it is everyone’s responsibility to protect the whole chain. At Alltech, we are trying to link the chain from farm to fork and create partnerships throughout that will provide the safest food chain possible,” the company says.

The possible advances that could be made through the 'gene chip' are immeasurable but, according to Lyons, for Alltech, it would be “a game changer as we take our primacy in science to a whole new level”.

“Leaders lead, and followers follow. This is what will bring us to a $4 billion company,” he concludes.

Dawn Meats Group Founded: 1980 Headquartered: Waterford Employs: 1,400 Sales: €1 billion Dawn Meats was set up as a family business by three farming families in Waterford in 1980. It is now one of Europe's largest food processing companies and meat suppliers, supplying more than 40 countries worldwide. Forming part of the Queally group, which is one of Ireland's largest privately owned agri-businesses. It has sales and marketing offices across Europe and employs 2,700 people. It has annual turnover of €1 billion.

Its brands include Black Angus, Charolais Gold, Red Hereford, Nature's Meadow, West Cork Beef, Dawn Chef, L'ile D'Erin, The Premium Butcher, Caledonia Crown, Highland Meats and Ridings.

Greencore Group plc Founded:1991 Headquartered: Dublin Employs: 12,000 Sales: €1.4 billion Greencorp Group is a leading manufacturer of convenience foods serving the UK, the US and Ireland. It has 22 convenience foods manufacturing sites in the UK and the US. It was established in 1991 through a flotation (IPO) of the state-owned Irish Sugar Corporation by the Irish government. Some 55 per cent of the company was privatised, with the government selling the rest of its holding in 1992 and 1993. The company employs just over 12,000 people and its headquarters are in Dublin. It employs around 50 people in Ireland, 11,000 in the UK and 1,000 in the US. Its 2012 annual showed a year on year growth of 44.5 per cent in revenue to £1.16 billion, “due to acquisition activity and business momentum”. It is a manufacturer of private label convenience food products (such as Bisto and Weightwatchers) for retailers and foodservice customers.

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Natural Capital People

ON THE MOVE Julie Sinnanmon

Julie Sinnamon has recently been appointed Chief Executive Officer of Enterprise Ireland which is the largest cleantech seed funder in Europe.

Throughout her career in Enterprise Ireland and IDA Ireland, Julie has gained considerable experience in a variety of industry sectors and international markets. Most recently, she was Executive Director for Global Business Development in Enterprise Ireland. In addition to working with a portfolio of companies across a wide range of sectors, Julie has taken a specific interest in Enterprise Ireland’s Strategy for Female Entrepreneurship. Julie has a Masters Degree in International Business (Fordham & IMI) and is a graduate of the Stanford Executive Programme.

Gina McCarthy

Gina McCarthy is the recently appointed Administrator of the US Environmental Protection

Agency. Appointed by President Obama in 2009 as Assistant Administrator for EPA’s Office of Air and Radiation, Gina has been a leading advocate for common-sense strategies to protect public health and the environment. Previously, Gina served as the Commissioner of the Connecticut Department of Environmental Protection. During her career, which spans over 30 years, she has worked at both the state and local levels on critical environmental issues and helped coordinate policies on economic growth, energy, transportation and the environment. Gina received a Bachelor of Arts in Social Anthropology from the University of Massachusetts at Boston and a joint Master of Science in Environmental Health Engineering and Planning and Policy from Tufts University.

Paul O’Donnell

Paul O'Donnell is a Principal at Greencoat Capital, based in Dublin. Paul has recently returned from London where he spent the last five years with Greencoat covering Irish and UK deal flow. Prior to Greencoat, Paul worked with Libertas Capital in London where he advised growth companies on raising equity in the renewable energy sector. He started his career with Pricewaterhouse Coopers in Dublin where he qualified as a Chartered Accountant.

Ciarán Ó Cuinn

David Hourihane David recently established the Irish office of Sustainable Development Capital LLP, a specialist financial and investment advisory firm, headquartered in London, with offices in New York, Hong Kong and Dublin. SDCL helps financial institutions and companies finance and invest in environmental and social infrastructure assets and services. Its invest-

Taking up his post in October, Ciarán Ó Cuinn is the new Center Director of MEDCR which is an international organisation established under the framework of the Middle East Peace Process to seek solutions to the water issues in the Middle East. Members include Governments of the Core Parties of the Peace Process, Jordan, Israel, Palestinian Authority are members along with Governments of US, Japan, Korea, Oman, Qatar, Netherlands, Spain. This role means that Ciarán is in charge of developing collaboration in the water area between core parties of the Middle East peace process.

Ciarán’s experience in international relations and the development of cross-border economic, infrastructural and research collaborations will help further achieve the MEDRC mission to address the water needs of the Core Parties and the countries of the MENA region. Previous to this, Ciarán was Executive Director for External & Strategic Affairs, DCU where he was Responsible for Strategic planning and communications.

He has also served as Special Advisor for the Department of Justice, Equality and Law Reform, the Department of Foreign Affairs and the Department of Communications, Energy and Natural Resources.

In these roles he was involved in international relations, conflict resolution and both renewables and energy policy.

ment business is focused on reducing demand for resources through energy efficiency.

Previously, David worked with a leading private legal practice in Dublin, where he was partner and head of the cleantech and regulated industries group.

David is recognised as one of Ireland's cleantech practitioners with a proven track record in structuring and executing cleantech transactions, including energy efficiency, wind, biomass, hydro, and waste management, and has a deep knowledge of the regulatory and policy drivers underpinning cleantech and energy efficiency. David is responsible for managing SDCL's Irish office, and coordinates deal origination and execution for SDCL's energy efficiency investments arm, along with heading up its advisory arm.

Send us your news to angela@tempusmedia.ie

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GLOBAL GRAND CHALLENGES President of Dublin City University, Brian MacCraith – the brains behind Ireland’s innovation campus to cluster like-minded companies together – speaks to Natural Capital’s Kathleen Barrington. pend even a few minutes with Brian MacCraith, President of Dublin City University (DCU), and pretty soon you will find yourself deep in conversation about “the global grand challenges’’ of our times.

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“It is the issue of being responsible for preparing our futures,” MacCraith explains.

“I very much like the saying that ‘we have not inherited the land from our fathers, we have borrowed it from our children’.’’

One of those challenges is “sustainability’’ - how to maintain energy hungry economic development activity at a steady level without exhausting the planet’s natural resources or causing severe environmental damage.

Professor MacCraith is bringing the issue of sustainability to life for DCU’s 12,000 students and 1200 staff through a number of educational and campus development initiatives. ¸

Brian MacCraith, President Dublin City University.

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ONE PART OF EDUCATION IS INSPIRATION. So, in 2010, MacCraith decided to establish a Nobel Laureate Lecture Series to stimulate students by exposing them to excellence.

Several of the Nobel Laureates who visited DCU have spoken on the issue of sustainability. They include former US Energy Secretary Dr Steven Chu who spoke on global warming and Mario Molina, whose seminal work highlighted the threat to the ozone layer from gases used in spray cans, refrigerants and solvents.

MacCraith is also offering students the theoretical and practical skills in the area of sustainability by offering courses at undergraduate and post-graduate level including a new masters degree in Sustainable Energy Finance.

DCU was established during an earlier severe economic downturn in the 1980s and has always seen itself as playing a very proactive role in national economic development. It has sought not only to educate its students to the highest academic standards, but also to collaborate with industry to build national prosperity.

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‘We have not inherited the land from our fathers, we have borrowed it from our children’ MacCraith, who himself has a track record of developing intellectual property in the field of sensor technology, is confident that DCU can build on this track record of dynamism, innovation and engagement with industry.

When he took over as President three years ago, MacCraith had the idea of creating an innovation campus that would cluster likeminded companies together.The companies could exchange ideas, develop innovation partnerships with the university and access the DCU talent pool via student internships.

“It needed a theme, so we chose clean technology.’’

MacCraith, earlier this year, appointed Ronan Furlong as Executive Director of DCU’s fledgling Cleantech Innovation Campus. The campus has already scored a major success by landing Dalkia, the energy division of Veolia, as its first tenant, while other blue chip companies and SME’s in the water, energy and ICT sectors are also lined up to follow (see page 71).

MacCraith is also planning to establish an Institute of Water on the DCU Innovation Campus which would look at issues like terrestrial water treatment and distribution, as well as marine energy and aquaculture. He expects there will be much greater focus on the quality of water and how it is distributed, given that water charges are now to be introduced in Ireland and he believes there is massive untapped potential in harnessing Ireland’s marine resources But MacCraith is not one to stand still and he also harbours international plans – plans to set up a Global Institute of Sustainability in association with Arizona State University (ASU). DCU has a history of co-operation with ASU stretching back more than seven years. ¸

Speaking at DCU's Nobel Laureate Lecture Series, Secretary Chu, former US Secretary of Energy and Nobel Prize Winner in Physics 1997.

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WALKING THE WALK But MacCraith doesn’t just talk the talk the talk, he also walks the walk. He has appointed a management team that takes very seriously the issue of balancing the growth of the university with the need to conserve resources and develop in an innovative and inclusive way.

DCU’s Green Campus Review, which was carried out in 2012, set out an action plan to reduce waste, minimise energy consumption and encourage biodiversity.

For example, Dr Declan Raftery, Chief Operations Officer, says he plans to reduce energy consumption on campus by 33 per cent by 2030 and to increase the consumption of energy from renewable sources.

MacCraith has also appointed Samantha Fahy as Sustainability Manager for the DCU Campus. Her job is to develop a sustainable community at DCU. Her initiatives range from carbon offsetting projects, to DCU’s involvement in The Green Way – a green economic development initiative founded

by DCU alongside Dublin City Council, Fingal County Council, Dublin Institute of Technology, Dublin Airport Authority and Ballymun Regeneration Ltd. “We want to develop a sustainable community where all members of DCU can make a contribution,’. I

Right: Secretary Chu, former US Secretary of Energy and Nobel Prize Winner in Physics, 1997 with Brian MacCraith, President, Dublin City University meeting with the scientists of tomorrow.

To do that you need to understand what their core needs are and so know what strategic engagement will best transform their business.

Helping promote Ireland’s green credentials with the global financial media

This course is unique in that it brings together professionals from overlapping sectors in the green economy, such as policy makers, financiers and senior executives. Many of the business people are at the cutting edge of developing new technologies.

ANGELA MADDEN, Managing Director, Tempus Media, on why she is giving up a weekend a month to attend Dublin City University’s Post-Graduate Certificate in Sustainable Energy Finance.

“It’s simply about developing and growing business – that’s the reason I make the journey to Dublin City University (DCU) every last Friday and Saturday of the month (when the day job permits!)

I am privileged to be part of this course reserved for enterprise and financial professionals but given my role as Director of Communications for the public/private sector initiative, Green International Financial Services Centre (GIFSC), there is no doubt I can better promote Ireland and what it has to offer on a global scale by fully understanding the marketplace and its drivers and challenges.

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The real learning comes when these groups pool their knowledge and share their experience with others to form a real understanding of how finance and policy makers can help business.

It is important to understand in detail what drives our innovators’ businesses – both the challenges and the opportunities.

More and more we have companies approach us from the green economy sector looking to translate their message into understandable language for the media and to work with them to differentiate them from the crowd.

Another appealing aspect of the course is that industry practitioners teach the course ensuring that participants are getting skills and knowledge that come from the real business world.

The fact that the course is part-time means that it is possible to upskill even if you are in full-time employment. That doesn’t mean I always make it to my classes, but my New Year’s Resolution will be to improve my attendance record.” www.tempusmedia.ie

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DCU’s Cleantech Innovation Campus will support 200 jobs in first 18 months says Ronan Furlong

ublin City University (DCU) is launching a new national centre for innovation in the cleantech sector, one of the fastest growing areas of economic activity and worth more than €5 trillion globally.

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The move comes after a recent study by chartered accountants EY found that Ireland could create 20,000 jobs and boost GDP by €4 billion by 2020 if we focussed on cleantech.

If we take advantage of our natural resources and focus on cleantech across our industrial base, we can create thousands of direct and indirect jobs in areas such as renewable energy generation and storage, energy efficiency retrofitting, smart water treatment and distribution, resource efficient waste systems, intelligent transport networks, green asset management and energy efficient data technologies.

cutting-edge teaching, research and development (R&D) in areas such as renewable energy, sustainability, green finance, Information and Communications Technology (ICT), big data and sensor technology – to name a few.

“My vision is to make DCU’s new Cleantech Innovation Campus the ‘TWINNING' WITH SAN JOSE location of choice for start-ups, SMEs and But the DCU Cleantech Innovation Campus is not simply ploughing its own larger companies working furrow but rather seeks to advance the Government’s Green Economy Action Plan in the cleantech sector” by introducing an all important international dimension.

My vision is to make DCU’s new Cleantech Innovation Campus the location of choice for start-ups, small and medium enterprises (SMEs) and larger companies working in the cleantech sector and to support 200 jobs in its initial18 months.

And, to that end, we have just agreed a collaborative partnership with Prospect Silicon Valley (Prospect SV) in San Jose, a partnership publically revealed in November.

The Prospect SV facility is designed to demonstrate the next generation of cleantech innovation in Silicon Valley and so The newly refurbished innovation campus, is a natural match for the DCU Cleantech the first phase of which is ready to occupy, is Innovation Campus. ideally located, right beside DCU’s main campus, 10 minutes from Dublin Airport The many planned collaborative activities and 15 minutes from Dublin city centre - include access to office and innovation space, academic researchers, pre-procurement trials, location, location, location as they say.

Companies who set up there will have test bedding opportunities and technology benefits aplenty including access to DCU’s commercialisation programmes for clean-¸

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tech companies in both jurisdictions, with Prospect SV hosting Irish companies in the Valley and vice versa.

In reality, our Cleantech Innovation Campus is a mirror image of theirs and both institutions see a real opportunity for collaboration that could lead to trade opportunities for both Dublin and San Jose companies and help solve environmental and resource efficiency problems for each municipality on the way.

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The prospective tenants and partners that we are talking to are largely operating in environmental sectors such as water (FLI Environmental,Veolia Water Ireland), energy (Dalkia, Vayu) and ICT (Shimmer, Intel), with specialisms ranging from wastewater treatment to Combined Heat and Power (CHP) and from smart grids to sensor technologies.

The Cleantech Innovation Campus will provide opportunities for companies to research, develop, deploy, test, commercialise Dublin has already made a name for itself by and showcase their innovative products or attracting leading Silicon Valley companies services in partnership with the university. such as Google, Intel and IBM. However, the We are committed to supporting entrepotential link with Prospect SV could be preneurs to develop emerging technologies particularly significant as Silicon Valley that will become the driving industries of transitions away from semiconductor and the future, and we anticipate that such consumer web type activities towards innovations will, in time, be central to sustainable, low carbon, ‘industrial internet’ achieving the wider DCU sustainability type technologies. strategy, while also having the potential to reduce operating costs, provide environmental benefits, and improve DCU service TESTBED FOR SUSTAINABLE delivery.

TECHNOLOGIES The DCU Cleantech Innovation Campus will serve as a 'living laboratory' for future test-bedding and commercialisation activities.

PRACTISING WHAT WE PREACH But time does not stand still and we are also in the process of preparing a longer term sustainability strategy for the innovation campus buildings, looking at deep energy efficiency retrofits and on-site renewables.

In the short term, we will also be looking at some early, smaller scale interventions such as lighting, solar energy, bicycles, rainwater harvesting, recycling and biodiversity.

With this in mind, we are about to publish a call for proposals from cleantech companies who can provide solutions for the innovation campus across waste, water, data, energy efficiency, on site renewables, intelligent transport and other categories as part of a ‘cleantech demonstration partnership policy’ being developed in consultation with the Sustainable Energy Authority of Ireland, Enterprise Ireland and other stakeholders. I Ronan Furlong is Executive Director of DCU’s Cleantech Innovation Campus

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Responsible Investment is on the move to the mainstream explains DANIEL BROOKSBANK who takes a look at global trends and how industry is handling change.

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he financial crisis, the carbon bubble, the “Shareholder Spring” – these all come within the realm of what is now termed “Responsible Investment”.

But it is most definitely not to be conflated with anything fuzzy, warm or feel-good for its own sake. Responsible investment is there to help manage investments for the benefit of… beneficiaries. Faced with shifting demographics and an increasingly uncertain investment climate in the future, it is a way of approaching investment that rejects the unproductive way of assigning capital that has so spectacularly failed so recently.

Responsible Investment grew out of the ethical investment campaigns against the apartheid regime in South Africa, and has gone by various monikers: ESG (environmental, social and governance), sustainable investment, SRI (socially responsible investment), ethical investment and so on. But responsible investment is now a much more nuanced term encompassing issues such as long-term investment, fiduciary duty and the correct allocation of capital. Increasingly the focus is on ownership, risk mitigation and materiality.

“It is a way of approaching investment that rejects the unproductive way of assigning capital that has so spectacularly failed so recently.”

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Look at what’s on the table for investors to grapple with: financial stability, systemic risk, market fragmentation, principal-agent problems, the social purpose of financial institutions, regulatory reform, to name a few. All while paying pensions in a lowreturn environment with sometimes less than solid covenants from their sponsoring institution.

And all against the backdrop of megatrends like energy, food and water security, human rights and poverty. Not to mention labyrinthine legislation and a cutthroat investment environment.

This is where responsible investment steps in, but how do we define it and why is it important? If you’re an investor and you’re worried about excessive executive pay or climate change, and you talk to companies and vote your shares then you’re probably already a responsible investor without even knowing it.

There’s no strict definition, and everybody will have his or her own take on it, but you’ll know it when you see it. It’s more of an overarching approach to acting as an investor and not a speculator over the long and not the short-term.

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The biggest beast in the field is probably the Principles for Responsible Investment (PRI), the United Nations-backed investorled initiative than is coming up for its tenth birthday. In that time it has accrued more than 1,200 signatories accounting for some $34 trillion in total combined assets under management. It means that a significant slice of the world’s invested capital has been committed to environmental, social and governance (ESG) issues.

The PRI offers a set of six high-level Principles and it is open to asset owners, asset managers and professional service providers.

Ireland has five signatories: the National Pensions Reserve Fund (NPRF) is the only “asset owner” signatory.

The NPRF has a formal responsible investment policy in place and uses its influence as a shareholder via a relationship with a third-party ‘engagement’ service called Hermes Equity Ownership Services, which is owned by the giant BT Pension Scheme.

THE PRINCIPLES 1. Incorporate Environmental, Social and Governance (ESG) issues into investment analysis and decision-making processes.

2. Be active owners and incorporate ESG issues into ownership policies & practices.

3. Seek appropriate disclosure on ESG issues by the entities in which they invest.

4. Promote acceptance and implementation of the Principles of Responsible Investment (PRI) within the investment industry.

5. Work together to enhance the effectiveness of the PRI within the investment industry.

6. Report on activities related to and progress towards implementing the PRI.

The NPRF as a responsible owner is obliged under 2008’s Cluster Munitions and AntiPersonnel Mines Act to avoid investments in damaging weapons. So it currently excludes from its portfolio 13 global companies on this basis, including major defence industry names such as Lockheed Martin, Northrop Grumman and Raytheon: this is responsible investment in action.

Indeed, the fund was a finalist in the 2013 Responsible Investor Reporting Awards – which seeks to recognise those funds that are most transparent about how they do things.

More than 1,000 funds globally were assessed as part of the judging process.

The other domestic PRI signatories are Avoca Capital, the Dublin-based credit investment management firm with €6 billion of assets under management, Irish Life Investment Managers and Kleinwort Benson Investors. Pension consultant Lane Clark & Peacock’s Irish arm is a service provider signatory. ¸

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Manus O'Donnell, CEO Mainstream Capital, John Mullins, CEO Amarenco, Charlie Reid, Director Blackrock Power and Steven Falci, Head of Strategy Development - Sustainable Investments, Kleinwort Benson Investors on an Irish Green Assets Managers’ panel at the Responsible Investors European Summit.

Globally, the PRI’s signatory base is a who’s who of top investment institutions, breaking down into 272 asset owners and 764 fund managers and 177 service providers.

The UK, by contrast, has 167 signatories to the PRI, comprising 35 asset owners including leading names such as BBC Pension Trust, the BP and Shell pension funds, the Universities Superannuation Scheme, the BT Pension Scheme and the Marks & Spencer Pension Scheme. One prominent signatory is the Northern Ireland Local Government Officers' Superannuation Committee (NILGOSC), whose pension fund has a clear policy on responsible investment and ESG. Of the 104 UK-based asset managers signed up, look out for players of the magnitude of Fidelity Worldwide, Legal & General and M&G to name a few.

Globally, the PRI’s signatory base is a who’s who of top investment institutions, breaking down into 272 asset owners and 764 fund managers and 177 service providers. In this last category you can count heavy-hitters such as Blackrock, Franklin Templeton, Goldman Sachs Asset Management, State Street Global Advisors and JPMorgan Asset Management. In November Morgan Stanley signed up – and made a massive commitment to the sector by launching a new Institute for Sustainable Investing.

It goes without saying that these are mainstream institutions, and while for sure not all of them are at the same stage of development as ‘responsible investors’, they have all made an express commitment to start the journey.

But the PRI is not the only responsible investment institution in the world. There are a host of other bodies that help promote the cause, such as the International Corporate Governance Network (ICGN), and regional and country-based Social Investment Forums (the “SIFs”). There are also international institutional investor bodies that do sterling work around climate change too. How all these various groups interact is in fact one of the challenges that the industry faces. It’s a common complaint that the ‘buyside’ is too fragmented and lacks a coherent voice. The PRI, for example, has run into some trouble with signatories in the Nordic region who object to it taking a role in public policy. ¸

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INDICES ARE A FEATURE OF RESPONSIBLE INVESTING A feature of the responsible investment landscape are indices. The main index providers such as FTSE have long experience with offerings such as the FTSE4Good series, which have done a fair amount by themselves to promote, not only responsible investment from their investor clients, but also improve behaviour from companies. No chief executive likes to lag their peers on any metric, and indices have proven a useful tool to engender more responsible practices.

Linked to the index phenomenon is the role of stock exchanges and listing rules. For example, the Johannesburg Stock Exchange has a long-running SRI index which has helped to put the South African exchange at the forefront of responsible investment globally. This has been tied in with groundbreaking legislation for both companies (the King Code) and pension funds (“Regulation 28”), which have

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certainly helped encourage responsible activity.

Another leading exchange, perhaps surprisingly, is Brazil’s BM&FBOVESPA. The largest exchange in Latin America runs a range of governance and eco-conscious indices that have helped make the country, alongside South Africa, one of the leading lights of responsible investment. Indeed, Brazil is a hotspot too for PRI signatories, with 63 in total and 18 asset owners. This is in the context of the Sustainable Stock Exchanges initiative, among whose latest signatories is the New York Stock Exchange.

Currently seven exchanges are backing the project, including, you guessed it, the Brazilian and South African exchanges.

The project is a way for the exchanges to explore how they, in collaboration with investors, regulators, and companies, can enhance corporate transparency – and ultimately performance – on ESG issues and encourage sustainable investment.

So with exchanges increasingly taking an active role, it means that sustainability issues will become even more critical for listed companies and their investors.This is clearly a trend that is not going to go away. I

Steven Falci, Head of Strategy Development Sustainable Investments, Kleinwort Benson Investors

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Private equity firms see benefit in responsible investment programmes But it’s not just listed companies that are affected by the move to responsible investing. Some of the world’s leading private equity firms, such as Carlyle and KKR, have recognised the benefits of putting responsible investment programmes in place. Carlyle looks at its portfolio companies via its ‘EcoValuScreen’ while KKR immortalized as the ‘Barbarians at the Gate’ - recently announced that its Green Portfolio Program has accumulated $917 million in cost savings since 2008 along with multiple environmental benefits.

So these savvy investors, outside the listed space, which number some of the world’s largest asset owners among their clients, clearly see the value in responsible investment.

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‘Soft law’ regulation edging responsible investing into the mainstream ne of the ways that responsible investment is edging its way into mainstream investment management is via what might be termed ‘soft law’ regulation.

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A good example of this is the Stewardship Code that was launched in the UK in 2010.

This is in a ‘comply or explain’ format that allows investors to adhere to a set of principles governing the interface between them and the companies in which they invest. It was the first ever codified approach to investment in this way and it has since been followed by similar codes at the European level and in other countries. You won’t be surprised to learn that South Africa is well advanced in this, with its Code for Responsible Investing in SA (CRISA) initiative.

It is probably too soon to definitively say how the various codes are working on the ground. And it is clear that some influential investors are not in favour of them, find them too “tick box” for their liking.

But by the same token, it is true that they are starting to crop up at the Request for Proposal (RFP) stage in asset management mandates. They certainly help to frame the debate around responsible investment and put the all-important relationship between asset owner, asset manager and investee company into a clearer context.

The mention of mandates, the contract between the asset owner and its asset managers, leads to a perennial issue around how to incentivize those who run money on your behalf.

This has been highlighted recently in the UK by the Law Commission’s review into fiduciary duty, a somewhat arcane term that in many ways goes to the heart of what it means to run assets over the long term.

Faced with long-run challenges such as climate change, fiduciary duty is having a long-overdue rethink.

It is probably too soon to definitively say how the various codes are working on the ground. And it is clear that some influential investors are not in favour of them, find them too “tick box” for their liking.

Allied to this is work that has been done elsewhere on mandates – which are so key in the institutional realm because they are in effect the ‘anchor’ of the entire investment chain. This relationship is vital to the running of the financial system: it’s the first link between the ultimate owners and their agents, so it has to work over the long term.

Unfortunately this hasn’t always been the case. Indeed, there was even a competition over 10 years ago – The Long-Term Mandate Competition - which sought answers to the conundrum.The fact that the UK’s Environment Agency pension fund, one of the world’s leading voices in responsible investment, used the pages of Responsible Investor to help find solutions to these issues is a sign that this critical element of the investment chain is still very much a work in progress.

Anything that takes this kind of look at where markets went wrong – and how they can be fixed - can and should be welcomed.

A criticism sometimes leveled is the lack of academic research backing up the central aims of responsible investment. Countering this, for one, is the giant US pension fund the California Public Employees Retirement System (CalPERS). It has launched a massive database of academic research on sustainability – hosting some 700 papers at last count.This should be the first port of call for anyone seeking a theoretical basis for sustainable investment. The PRI’s Academic Network is another goldmine for research.

Perhaps the key research in the field, though, is by Robert Eccles and George Serafeim at Harvard and Ioannis Ioannou of the London Business School. They found a financial premium for ‘high sustainability’ companies.

Their research is called The Impact of a Corporate Culture of Sustainability on Corporate Behaviour and Performance.

Also recommended is a piece of work by Deutsche Bank. It conducted a comprehensive review of the literature in a study called Sustainable Investing: Establishing Long-Term Value and Performance and found that ESG factors correlate with superior risk-adjusted returns.

The European Commission is doing its bit to promote long-termism, with a whole series of possible measures contained in a wide-ranging Green Paper that has gone out to consultation.This will be closely watched as, again, it helps set the temperature of the debate. I

Mention must be made here of the Kay Review, the UK government sponsored review of market short-termism conducted by noted economic commentator Professor John Kay.The report has helped to add some intellectual heft to the thinking around responsible investment, having tackled issues such as the principal-agent problem and fiduciary duty. Other countries, notably Japan, have taken the hint and are conducting their own similar reviews.

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MOVING AWAY FROM THE INSTITUTIONAL, SEGREGATED MANDATE SPACE, JUST HOW BIG IS THE RESPONSIBLE INVESTMENT FUND MARKET? he UK’s Investment Management Association, says retail ethical funds under management are currently just under £9 billion (€10.7 billion) – giving them a 1.2 per cent share of the total market. Europe-wide, Luxembourg fund industry body ALFI reckons that responsible investing funds have grown since 2010 by 19 per cent from €199 billion to €237.9 billion, according to a report commissioned from consultants at KPMG.

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It puts the ‘universe’ of RI funds in Europe at 1,775 funds. One interesting initiative coming out of the Grand Duchy is a fund rating system called LuxFLAG, which labels microfinance and environmental funds. It should be noted that Ireland is a domicile for many responsible investment themed funds, for example those run by environmental asset manager Impax of the UK. No discussion about institutional investment should ignore the role of investment consultants, who play a gate-keeper role between their clients and asset managers. To what extent do consultants ‘get’ responsible investment? Many of the largest firms have teams of very committed people who in many ways are ahead of their clients in terms of appreciating the value of responsible investment. For example, Mercer, has a new version of its Global Investment Manager Database (GIMD) enabling clients to screen strategies by ESG ratings. And it was Mercer too who, in a blockbuster report in 2011 - in collaboration with a group of 14 leading global investors - recommended that institutional investors shift up to 40 per cent of their assets into “climate sensitive” assets to mitigate environmental costs.

Responsible investment, growing as it did out of the equity ownership culture, has hitherto had an arms-length relationship with fixed income investing.The feeling has been that it’s easier to engage if you are an owner, though this is changing.The PRI has a fixed income “workstream” and there is also the E-RISC (Environmental Risk in Sovereign Credit analysis) project backed by leading investors and the UN Environment Programme Finance Initiative (UNEP FI).

And asset classes such as real estate and infrastructure are also increasingly coming onto the ESG radar screen. Just look at the huge potential of green infrastructure in the future, and the role of institutional capital can play.

It should be noted here that there’s a sliding scale of opinions within the responsible investment community about divestment, or selling your shares in a company you disapprove of. For some it’s the ultimate sanction, but for others it’s a sign that the dialogue between investor and company has completely broken down. After all, if you don’t own a stake in a company, how can you hope to influence it? But divestment is still an option, in fact some of the large Swedish government funds recently opted to exit leading companies including WalMart and the controversial mining company Freeport McMoRan Copper & Gold – despite years of dialogue with them on a range of issues. Indeed they concluded that further engagement would be “ineffectual”.

And of course that theme continues in the current 350.org divestment campaign by environmentalist Bill McKibben. He’s trying, with some success, to persuade educational foundations in the US to dump fossil fuel investments. It’s a campaign the explicitly references the anti-apartheid era activism.

A lot of what the industry terms “engagement” between investors and corporates goes on behind the scenes and it can be

difficult to gauge its effectiveness. The most public form of engagement is the annual general meeting and a whole industry has grown up to advise investors on how to vote their shares at AGMs. Some investors go further and initiate the process of getting their proposals onto the AGM agenda – indeed this can often, especially in the US, be the spur to fruitful engagement.

No less a personage than Prince Charles has helped to put the matter on the table. He argues that institutional investors have a need, and arguably a duty, to ensure environmental, social and economic risks are identified and managed. He, for one, says: “With an ageing population, and pension fund liabilities that are therefore stretching out for many decades, surely the current focus on ‘quarterly capitalism’ is becoming increasingly unfit for purpose?” He for one sees a case for ensuring portfolios are resilient in the long-term.

This brief review of the responsible investment landscape is by definition incomplete – there is much more going on than can be looked at here. We haven’t even touched on the whole issue of ‘integrated reporting’ and the importance of materiality to corporate sustainability information, to take one example. And the role of investment banks is probably worth a whole separate article!

But the final word, perhaps, should go to Ireland’s very own National Pension Fund Reserve Commission: “The Commission recognises that the way in which companies manage environmental, social and governance factors can affect their longterm performance and it has taken steps to integrate these factors into its ownership and investment decision making practices.” That, in a nutshell, is responsible investment. I Daniel Brooksbank is the Editor of Responsible Investor

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The Middle East is poised to become a hotspot of renewables activity over the next few decades. GRAHAM COOPER outlines which countries and sectors hold the most promise for investors.

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Shams 1 power plant in the UAE. See page 87.

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LOBAL

in renewable energy has slumped in the past two years, particularly in the US and Europe. Bloomberg New Energy Finance (BNEF) estimates that investments in clean energy fell to a four-year low in the first six months of this year, with US investments down by almost 40 per cent and Europe down by 35 per cent compared with the same period in 2012. Even China saw a 24 per cent decline.

INVESTMENT

This followed a drop in global clean energy investments of around 11 per cent last year compared with 2011.

But one cause for optimism is the dramatic growth in renewables in the Middle East.

“Significant development is [being] seen for the first time in the Middle East,” IEA Executive Director, Maria van der Hoeven, announced in New York earlier this year.

The Middle East holds nearly half of the world’s renewable energy potential - Santiago Seage, Abengoa Solar.

New investments in renewables in the Middle East and North Africa (MENA) rose almost 40 per cent to $2.9 billion in 2012, according to BNEF. Vahid Fotuhi, president of the Emirates Solar Industry Association, says demand in the region is soaring, driven by rapid economic growth, urbanisation and policies to curb dependence on fossil fuels. At present, some 60 per cent of power generated in the region comes from natural gas and around 37 per cent from oil, he told a recent meeting of the International Project Finance Association in London.

PICKING WINNERS The countries attracting most interest from investors are Saudi Arabia, Jordan, Kuwait, UAE and Qatar, according to a recent report from law firm Eversheds, Developing Renewable Energy Projects: A guide to achieving success in the Middle East.

All of them receive more than twice as much solar radiation as Germany, noted Steve Griffiths of the Masdar Institute. Over the next five years, more than 10GW of solar capacity is likely to be installed in the MENA region, he said, while Turkey and Morocco also have promise.

Key findings from the Eversheds report are: JORDAN is almost totally reliant on imports of oil and gas. Renewable energy targets are seven per cent and 10 per cent of the primary energy mix by 2015 and 2020 respectively. Planned additional capacity includes: 600-1,200MW from wind energy; 300-600MW from solar energy; and 30-50MW from waste-to-energy. ¸

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KUWAIT relies on oil for more than 70 per cent of its electricity generation. The country currently has no utility-scale renewables facilities.The Emir of Kuwait has said the country plans to produce one per cent of its energy consumption from wind and solar by 2015 and up to 15 per cent by 2030, but these figures have not been confirmed by the Ministry of Electricity and Water.

QATAR is the world’s largest supplier of liquefied natural gas and has yet to generate a significant amount of renewable power. Its aim is to meet 20 per cent of its electricity demand from renewables (mostly solar) by 2030.

UNITED ARAB EMIRATES is expected to see electricity demand grow by more than 10 per cent annually for the foreseeable future. Of the seven emirates in the federation, Abu Dhabi and Dubai have most of the land mass and population.The former has more than 90 per cent of the UAE’s oil and gas reserves and generates most of its electricity from gas, some of which is imported.

ABU DHABI aims to generate seven per cent of its electricity – about 1.6GW – from renewable sources by 2020. Dubai, which also imports gas, plans to generate one per cent of its total power supply from solar energy by 2020 and five per cent by 2030.

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Saudi Arabia is probably the most attractive country in the region for investment

SAUDI ARABIA is probably the most attractive country in the region for investment, solar industry specialists say.

The country is seeking $109 billion of investment to increase its solar power capacity to 41GW by 2032 from a mere 5MW now. In addition, it is seeking an additional 13GW from other renewables, mostly wind, by the same date.

Deploying solar power will be economically beneficial for the country as long as the oil price remains above $80/barrel, said Grant Greatrex, senior partner with MaC Group, a Spanish consultancy advising Saudi Aramco, the state-owned oil giant, on its solar projects.

Currently, the contribution of solar energy, across the whole region, is less than that in Slovenia, Fotuhi noted wryly, despite the latter’s modest size and temperate climate.

Much of the Middle East receives continuous solar radiation for about 80 per cent of the year.Yet most cities in the region “are now importing oil for power generation,” and “we are starting to see brown-outs and black-outs,” he added.

But the situation is changing fast, according to the new MENA 2013 Renewables Status Report produced by REN21, a network of industry groups, scientists and government officials, in association with the government of the United Arab Emirates (UAE) and the International Renewable Energy Association. Non-hydropower renewables generation in the region – which it defines as stretching from Morocco to Iran – more than doubled between 2008 and 2011. ¸

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AMBITIOUS TARGETS All 21 MENA countries now have renewable energy targets, up from just five in 2007, the report notes. If achieved, these targets would result in 107GW of installed capacity in the region by 2030. Saudi Arabia alone aims to install 54GW of renewables capacity by 2032.

DECEMBER 2013 / JANUARY 2014

NOEC, on the other hand, there is growing recognition of the opportunity cost of using oil and gas for domestic purposes, such as power generation and desalination.

On current projections, “by 2020, Saudi Arabia will be consuming more oil for power generation than it exports,” Fotuhi says.

At the end of 2012, hydropower was the biggest source of renewable energy in the At least 18 of the MENA countries region, with Iran and Egypt having the most currently have policies to promote the installed capacity (9.5GW and 2.8GW growth of renewables, Ren21 says. Feed-in respectively). Across the region, hydro genertariffs are in use, or being developed, in at ation rose by 30 per cent between 2008 and least 10 states, and 11 offer fiscal incentives, 2011. such as capital subsidies or tax credits. But the most common support mechanisms are Wind was the second biggest source, with public competitive bidding for fixed Egypt leading the way with 550MW of quantities of renewable power and public capacity, followed by Morocco (291MW) and Tunisia (154MW). But less than half the grants and subsidies. countries in the region were using wind Most of the targets and incentive power. mechanisms prioritise solar energy – including concentrated solar power (CSP) The MENA region may require more than and solar water heaters as well as 120GW in new generation capacity at a photovoltaic panels – in recognition of the total cost of more than $250 billion by 2017 many hours of sunshine in most of the according to Steve Griffiths, Executive Director, Institute Initiatives, at the Masdar region and declining hardware costs.

Institute of Science & Technology in Abu “The Middle East holds nearly half of the Dhabi. world’s renewable energy potential,” says Santiago Seage, CEO of Abengoa Solar. On the other hand, all MENA countries “The abundance of solar energy is an were using solar PV for electricity opportunity to integrate sustainable, clean generation, although overall use was modest sources of power that address energy security in comparison with hydro and wind power.

Israel led the field with almost 270MW, and climate change.”

UAE had installed 22.5MW, while Egypt On current projections, by 2020, Saudi and Morocco had around 15MW each. The Arabia will be consuming more oil for Shams 1 project in Abu Dhabi has given the power generation than it exports according solar sector a major boost since the end of to Vahid Fotuhi, Emirates Solar Industry the year.

Association. Total power generation in the region in 2011 was about 1,200 TWh, a 20 Biomass and geothermal are the least per cent increase on 2008 with the share of exploited renewable resources. renewables rising to 3.3 per cent from 0.4 per cent over the same period.

A striking feature of recent investments has been the entry of international energy companies into the solar sector. For example, France’s Total and Spain’s Abengoa both have 20 per cent stakes in the UAE’s 100MW Shams 1 project, the largest CSP facility in the world, Shell’s subsidiary Showa Shell Sekiyu has financed a PV facility in Saudi Arabia, and France’s EDF is investing around $72 million in an 18MW PV facility in Israel. ¸

“The abundance of solar energy is an opportunity to integrate sustainable, clean sources of power that address energy security and climate change.”

SOURCES OF INVESTMENT

DIFFERING DRIVERS BEHIND RENEWABLES The pressures for more renewables capacity differ across the region, notes the Ren21 report.The key distinction, it says, is between net oil importing countries (NOIC) and net oil exporting countries (NOEC). The former are most concerned about energy security and the desire to reduce their dependence on expensive foreign oil. In the

The region’s ambitious development plans for renewables will require substantial investment.The MENA region may require more than 120GW in new generation capacity at a total cost of more than $250 billion by 2017, says Griffiths.

Despite a 40 per cent increase in new investments in renewables in the region in 2012, this is still a tiny fraction of total energy investments.

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DECEMBER 2013 / JANUARY 2014

provide grants or concessionary loans and around $750 million is already earmarked to help Algeria, Egypt, Jordan, Morocco and Tunisia to deploy around 1GW of CSP. The UN’s Green Climate Fund, which aims to channel $100 billion a year from public and private sources to climate change projects in developing countries by 2020, is also expected to back the region’s clean energy aspirations.

SHAMS 1 SHOWS THE WAY The largest renewable energy project in the Middle East, the Shams 1 concentrated solar plant (CSP), is a 100MW grid-connected facility in Abu Dhabi.

Comprising 258,000 mirrors, spread over an areas of 2.5km2 – equivalent to 285 football pitches – the plant will generate most power at times of peak demand, thus helping the UAE reduce its need for oil-fired ‘peaking’ generation plant which is expensive to run and stands idle for most of the year.

The mirrors concentrate the heat from sunlight onto oil-filled pipes which, in turn, heat water to generate steam, which is then used to drive turbines and generate electricity.

Shams 1 was developed by a joint venture between France’s Total (20 per cent), Spain’s Abengoa (20 per cent) and Masdar (60 per cent), a subsidiary of the Abu Dhabi government-owned Mudabala Development Company.

“The Middle East is poised for major investments in renewables, and Shams 1 proves the economic and environmental advantage of deploying large-scale solar projects,” said Sultan Ahmed Al Jaber, CEO of Masdar, at the official opening in March this year.

In general, however, it is national governments and publicly-owned electricity generators that are taking the lead, often with the support of development banks.

Indeed, concessionary finance in the form of long-term, low-interest loans, remains an important source for many renewables projects across the region.

Some local regional funding is emerging, Ren21 notes, particularly from the Abu Dhabi Fund for Development.The UAE has also scaled up support for renewables within its grant aid programme.

CHALLENGES FOR PRIVATE SECTOR FINANCE Long-term private capital for large, capitalintensive renewables projects, such as solar and wind, comes mainly from asset and debt financing. Equity capital usually represents a small share of the total.

Challenges facing private investors in the region, include subsidised energy bills, lack of public awareness, and political and policy risk.

Local banks in Saudi Arabia and Jordan are looking at the possibility of funding renewables projects, Javier Areitio, Madridbased managing director of SunEdison, told the IPFA meeting in London.

Saudi banks have considerable experience in funding conventional power projects, he noted, and there could be opportunities for experienced international banks such as HSBC and Standard Chartered. In Jordan, however, the levels of liquidity and knowledge of domestic banks are lower and multilateral development banks are therefore likely to play a bigger role.

A ROLE FOR CLIMATE FUNDS? A range of climate finance vehicles could help boost clean energy in the region. For example, The Clean Technology Fund (CTF) – one of the World Bank’s four climate investment funds – has been pledged $5.2 billion. It will use this money to

Other potential financing mechanisms include Nationally Appropriate Mitigation Actions (NAMAs), a new generation of financing mechanisms to support climate change mitigation efforts, proposed under the UN climate change negotiations. Egypt, Jordan, Morocco and Tunisia have already submitted NAMAs including renewable energy projects to the UN authorities, notes the Ren21 report.

Climate finance and private capital are likely to have more of a role in the NOEC countries, says the Ren21 study.

ISLAMIC FINANCE One potential source of finance for green power in the Middle East region is ‘green Sukuk’ say some market insiders.

Sukuk are Sharia-compliant tradeable securities, widely used in the Middle East, that can play a similar role to conventional bonds although they pay no interest.They have not yet been used to finance renewables projects, although they are commonly used for other infrastructure projects across the region.

A Green Sukuk Working Group has been set up by the Climate Bonds Initiative, the Gulf Bond and Sukuk Association and the MENA Clean Energy Business Council, to promote the use of Sukuk for renewable energy and other clean tech projects.

The World Bank is currently examining the possibility of issuing its first Sukuk to fund environmental projects with a variety of issuers in the Middle East.

Green Sukuk would provide access to a growing pool of liquidity and expand the traditional investor base for such projects, said law firm Eversheds in a recent report.

Conventional investors in Europe and the Far East are also increasingly comfortable with the concept, it noted.

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IRELAND’S

100 MOST INFLUENTIAL SUSTAINABILITY LEADERS In 2014, the Sustainability Gathering team supported by a high-level selection panel will identify the top 100 Irish and Irish diaspora individuals active in sustainability for their innovation and leadership across policy, finance, enterprise and education.

Guided by criteria defined by Dublin City University this selection panel will endeavor to identify and celebrate Irish sustainability leadership.

Chaired by Terence O’Rourke, Chairman, Enterprise Ireland selection panel members include Dr Brian Motherway, CEO, SEAI; Dr Brian MacCraith, President, DCU; Ronan King, Chairman, The Green Way; Peter Coyle, Chairman, Marine Renewable Industry Association (MRIA); Kenneth Matthews, CEO, Irish Wind & Energy Association (IWEA); Eamonn Egan, CEO, Lloyd’s Ireland; Ann O’Dea, CEO and Editor-at-large, Silicon Republic; Brian McMahon, Executive Director,

Summit Finuas Network and Peter Rose, co-founder, Tekenable.

As per Government’s Delivering Our Green Potential policy, 2014 categories include: Food/Agriculture/Marine/ Forestry; Professional and Financial Services; Green Business (Energy Efficiency, Energy Services, Water, Waste, Transport, Construction, Tourism); Renewable Energy (Wind, Solar, Ocean, Geothermal, Bioenergy); ICT/Internet/ Media (Smart Grid, Smart Cities, CSR; NGO/Policy/ Politics; multidisciplinary (trade association); and Education/Science/R&D.

For further information please contact Carla Soriano at Carla.soriano@sustainabilitygathering.com

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The Iarnróid Éireann-sponsored Sustainability Train sets off from Heuston Station, Dublin, with attendees for the inaugural International Sustainability Summit at the Volvo Ocean Race finale, July 2012.

Ireland on the right track

to sustainable future Dublin Castle was the backdrop for Ireland’s second International Sustainability Summit, which saw the kingpins of the green economy from policy-makers to enterprise companies and international financial services professionals come together to help pave next steps for Ireland.

By ANGELA MADDEN

ut this year was extra special as the Summit, which took place on December 12, was held as part of the Year of Gathering Ireland 2013 and is an official Gathering event – The Sustainability Gathering to be exact.

B

Over 70 million people worldwide claim Irish ancestry and The Gathering Ireland 2013 was conceived to provide the perfect excuse to reach out to those who have moved away, their relatives, friends and descendants, and invite them home.

For those who haven’t heard about the oneyear initiative, The Gathering Ireland 2013 opened its arms to hundreds of thousands of friends and family from all over the world, calling them home to gatherings in villages, towns and cities.

This year’s International Sustainability Summit, The Sustainability Gathering, hosted an impressive array of experts in key sectors of the green economy.

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One of big names who took to the stage was Angus McCrone, Editor-in-Chief, Bloomberg New Energy Finance who was tasked with setting the scene for sustainable financing oportunities and the market globally.

The Sustainability Gathering was announced by an Taoiseach (Irish Prime Minister) Enda Kenny at the inaugural International Sustainability Summit, Volvo Ocean Race 2012.

“This event demonstrates Ireland's leadership role in bringing together key decisionmakers globally to discuss and debate the transition to a low-carbon economy,” he said in Galway before revealing there was to be a second Summit in 2013.

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Some of those who took part in Galway were Sean Kidney, Chairman, Climate Bonds Initiative, Minister Pat Rabbitte, TD, Brendan McGrath, CEO, Gaelectric, Brian Motherway, CEO, Sustainable Energy Authority of Ireland, Sean Hawkshaw, CEO, Kleinwort Benson Investors, Michael White, Partner, Enercap Capital, John McKiernan, Partner, Greencoat Capital, Peter Heffernan, CEO Marine Institute and Barry O’Flynn, Director, Environmental Finance, EY. The International Sustainability Summit and The Sustainability Gathering have been conceived and led by Stephen Nolan, Chairperson, who also happens to be Executive Co-ordinator for the public private initiative the Green International Financial Services Centre (GIFSC).

“the global move to a low-carbon economic model is set to be as significant as the Industrial Revolution.

Ireland has every resource needed to be at the centre of this emerging marketplace, attract finance and create jobs"

He also stressed the importance of the sector to Ireland’s ambitions. "The green economy and sustainable development agendas are a key element of Ireland's economic recovery strategy.”

The journey from the Volvo Ocean Race to Dublin Castle An Taoiseach Enda Kenny opened the International Sustainability Summit in Galway last summer where Irish and global leaders in the sustainable sector converged to discuss finance challenges and opportunities arising as a result of the global swerve to a low-carbon economic model.

Chief executives from clean-tech funds across the globe and investment management companies took part in the summit, which was the largest sustainability themed event in Ireland during the year.

The Summit itself took place as part of the Volvo Ocean Race Business Expo that coincided with the finish of the global sailing race in Galway Bay. Ireland's policy-makers, financiers and representatives from the enterprise sector came together with global figures and companies at the summit to discuss and debate best practice and the opportunities the green economy afforded.

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Some of the finance, policy and enterprise professionals who jumped aboard the Iarnróid Éireann Sustainability Train.

Looking at green energy investments alone, Nolan said there has been dramatic growth worldwide, with some US$268bn invested in this space in 2012, the second highest figure ever for the clean energy sector, and five times higher than 2004 figures.

But, putting the bling into the sustainability theme last year was Iarnród Éireann which supplied a special train free of charge from Dublin to Galway return for invited event attendees – taking some 200 cars off the road in the process.

“This trend is set to continue with the global move to a low-carbon economic model set to be as significant as the Industrial Revolution. Ireland has every resource needed to be at the centre of this emerging marketplace, attract finance and create jobs," said Nolan.

There was more than one comment about the Hogwarts express that day, but what it did show - and this year’s Sustainability Gathering serves to further emphasise - is that Ireland is on the right track to a low carbon economy. ¸

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International Sustainability Summit, Volvo Ocean Race July 2012 CLOCKWISE FROM TOP: Pat Rabbitte (centre) Minister for Communications, Energy and Natural Resources with David Guest, Chairman GIFSC and Michael Hayes KPMG & GIFSC Steering Group member attending the Sustainability Summit at the Volvo Ocean Race.

John Gilliland, Tectona G Capital, Tristan Conway-Behan of Arthur Cox and Valerie Brennan of Coillte attending the Sustainability Summit.

Sean Kidney, Chairman Climate Bonds Initiative.

Stephen Nolan, Chairman, Sustainability Gathering, Mark Bennett (Dublin City Council), An Taoiseach Enda Kenny TD and Ronan King (Chairman, Green Way) at the International Sustainability Summit.

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Ronan King, Chairman The Green Way and other delegates look on as panel members discuss sustainability investment.

2013 SUSTAINABILITY GATHERING SPEAKERS

An Taoiseach Enda Kenny with Galway delegates, Volvo Ocean Race, July 2012

The December 2013 Sustainability Gathering attracted a litany of green economy movers and shakers from the key sectors driving growth – policy, enterprise and financial services.

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Minister Richard Bruton TD, Department of Jobs, Enterprise & Innovation David Murphy, Business Editor, RTÉ Stephen Nolan, Sustainability Gathering Chairperson Jonathan Maxwell, CEO Sustainable Development Capital (SDCL) William Parnell, Head of Competitiveness & Climate Change, Department of Jobs, Enterprise and Innovation Alex O’Cinneide, CEO, Gore Street Capital Louise Wilson, Managing Director, Abundance Generation Richard Nourse, Managing Partner, Greencoat Capital Bernard Byrne, Director of Personal, Business & Corporate Banking, Board member, AIB Sean O’Driscoll, CEO, Glen Dimplex Eugene O’Callaghan, Director, National Pension Reserve Fund Professor Diarmaid Ferriter, Modern History, UCD John Bruton, President EU European Resource Efficiency Platform & IFSC President Julie Sinnamon, CEO, Enterprise Ireland Mark Foley, Managing Director, Coillte Enterprises Kieran Donoghue, Global Head of International Financial Services, IDA Ireland Angus McCrone, Editor-in-Chief, Blommberg New Energy Finance Dr Brian Motherway, CEO, SEAI Professor Brian MacCraith, President, DCU John Mullins, CEO, Amarenco Stjohn O'Connor, Principal Officer, Department of Communications, Energy and Natural Resources Fiona Quinn, Principal Officer, Department of the Environment, Community and Local Government Jim Gavin, Manager Dublin Gaelic Football team

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The Irish diaspora is making waves in the world’s moves to finance a low carbon economy says ANGELA MADDEN who takes a look at three men making a difference across the globe.

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THE IRISH DIASPORA; MAKING A DIFFERENCE

In its first year GIB abated almost 25,000 tonnes of Co2 – and to most people that is more easily understood when you talk of taking 9,500 cars off the road for a year.

SHAUN KINGSBURY =

ou just need to turn to Belfast man Shaun Kingsbury to understand the influence of the Irish diaspora on financing this change.

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Kingsbury has been the Chief Executive and Director of UK Green Investment Bank PLC (GIB) since October 2012 – the first bank of its kind in the world with £3.8 billion of funding from the UK government to invest in sustainable projects.

GIB's mission is to mobilise investment in the UK's green economy and with Kingsbury at the helm in its first year it did just that - it mobilized some £2.3 billion, saw £635 million in capital commitments and had achieved £121 million of capital investment by March 2013.

But, perhaps, monetary figures don’t tell the whole story of Kingsbury’s leadership. In its first year GIB abated almost 25,000 tonnes of CO2 – and to most people that is more easily understood when you talk of taking 9,500 cars off the road for a year. And in the same time period 67,000 MWh of renewable electricity was produced – equivalent to annual electricity for 15,000 homes.

GIB is a for profit bank where there are no grants or soft loans so perhaps it is not

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SUMMARY OF TRANSACTIONS THAT UTILISE GIB FUNDING: Sector

Deal

Date

GIB commitment (£m)

Waste Waste NDEE NDEE Waste OSW Waste Waste Green Deal OSW NDEE Total

Foresight Greensphere SDCL Equitix Drax Walney Wakefield Gloucester Green Deal Rhyl Flats Aviva fund

Nov-12 Nov-12 Nov-12 Nov-12 Dec-12 Dec-12 Jan-13 Feb-13 Mar-13 Mar-13 Mar-13

50 30 50 50 100 46 30 47 125 57 50 635

TotalTransaction (GIB + 3rd Party £m)

100 60 100 100 990 325 122 185 181 57 100 2,320

Case studies for all transactions are available at www.greeninvestmentbank.com

surprising Kingsbury was selected for the role of Chief Executive given his expertise at Hudson Clean Energy where he was a Partner responsible for Hudson's European offices.

Kingsbury also served as a Vice President of Sales and Marketing for Centrica Plc’s retail power business, led a number of renewable energy investments and has been active in wind development over the last eight years.

He was also a Founding Partner of Pulsar Energy Capital LLP where he led several transactions in the wind and wind turbine component sectors.

The first decade of his career was spent with Shell International, developing and managing businesses within the gas and power sector in Africa, South East Asia, United States, and London, where he was responsible for the development of Shell’s global gas and power strategy.

Even further back, Kingsbury’s credentials in the green economy space were apparent. He served as a Commercial Director at ITI Scotland Limited and back in 2005 was an Entrepreneur in Residence of 3i Group advising on a number of renewable energy transaction opportunities in Europe.

But, Kingsbury is not alone.There are others from the Irish Diaspora leading the way in other parts of the world. ¸

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ALEX O’CINNEIDE Alex O’Cinneide is perhaps one of the best known of the Irish Diaspora for his fund management and capital raising expertise for some of the most successful companies in the sector. He is a man widely recognized as a global leader in the field of clean tech investing.

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THE IRISH DIASPORA; MAKING A DIFFERENCE

You think that would be sufficient to keep O’Cinneide occupied but somehow he finds the time, alongside those commercial activities, to serve on the board of the NGO Educate Girls Globally, the NGO thirst4water and support Ireland’s GIFSC initiative.

A role, which has been synomous with O’Cinneide is that of General Manager and Head of Investments of Masdar Capital, the Today O’Cinneide, originally from Dublin, private equity arm of Masdar, the $15 billion is CEO of Gore Street Capital where he Abu Dhabi sovereign fund, - a position he manages significant capital on behalf of instit- held from January 2006 to December 2012. utional investors for renewable investments. Significantly, and demonstrating his leadership in the renewable funds sector, Masdar But, he is a man who likes to keep busy and Capital a group which Alex founded, is highly sought after by some of the most managed over $550 million of capital from exciting sustainable finance projects around. some of the most significant investors operating such as GE, Siemens, DBJ, Besides his role in Gore Street he acts a Deutsche Bank, Credit Suisse and of course Senior Advisor to Kleinwort Benson Bank Masdar itself. in London, as a Senior Advisor to Paladin Capital Group in Washington DC, serves on In 2011 the Irish Independent recognized the Investment committee for one of him as a top 30 cream of the crop abroad SDCL's funds, is an Investment committee when he was overseeing $550m (€373m) of member of the Asian renewables fund of investments through two funds for Masdar, a Indochina Capital and is partner in Aqal state-backed Abu Dhabi green technology investment firm.

Capital, a leading impact investment fund.

DECEMBER 2013 / JANUARY WINTER 2014 2013

Like Kingsbury, even his early career was putting him on the path to sustainable finance leadership as previous roles saw him as Managing Partner in Quorum European Partners, an energy technology focused venture capital firm.

While at Quorum European Partners (now Lindon Capital), O’Cinneide set up and ran its European operation.

He started his career in two private equity backed technology companies, before going on to join KPMG where he was a director in both the Strategy Group and the Ventures Group in London and New York.

O’Cinneide, who is a published author on many topics, holds a Bachelor of Arts and Master of Arts from Trinity College Dublin, a Master of Science from the London School of Economics and a Masters in Finance from the London Business School. ¸

He is a man who likes to keep busy and is highly sought after by some of the most exciting sustainable finance projects around.

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THE IRISH DIASPORA; MAKING A DIFFERENCE

Partnering with Missouri farmers and developing strong community relations with rural co-ops and developers such as John Deere, Wind Capital became a leading developer, owner and operator of utility-scale wind farms in rural America.

TOM CARNAHAN om Carnahan has recently been making the headlines, tipped as the leading candidate to become President Obama’s next US Ambassador to Ireland.

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Such a position would not be surprising for the 44 year old raised in Rolla, Missouri, who comes from illustrious Irish American political stock and has kept up the family tradition of overachieving.

He is the son of Mel Carnahan who was Governor of Missouri from 1993 to 2000 and posthumous US Senator-elect (2000) and Jean Anne Carpenter Carnahan who was appointed to the US Senate to fill the seat to which her husband was posthumously elected.

And, before that, Carnahan's grandfather, ASJ Carnahan, served in Congress for seven terms and was appointed by President Kennedy as US Ambassador to Sierra Leone.

Carnahan is also past Chairman of the American Wind Energy Association, a national trade association of domestic and international wind energy interests that promotes wind energy.

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In 2005, drawing inspiration from his rural Missouri upbringing, he founded Wind Capital Group - a privately owned builder and developer of wind farms in the Midwest and in 2008 produced the power for the first 100 percent windpowered city in the United States.

Partnering with Missouri farmers and developing strong community relations with rural co-ops and developers such as John Deere, Wind Capital became a leading developer, owner and operator of utilityscale wind farms in rural America.

Carnahan received a Bachelor of Arts degree from William Jewell College in 1991 during which time he spent one year at Homerton College, Cambridge University, England. He then received his juris doctor from the University of Missouri in 1995 and was a staff attorney for the St Louis, Missouri City Counselor's office from 1995 to 1997 and a partner for the St Louis firm of Carnahan & Garvin from 1997 to 2005. I

One of the company’s wind projects in northwest Missouri, just south of King City, qualified for a $107 million federal tax credit from the American Recovery and Reinvestment Act of 2009. The company’s wind farms have played a vital role in the area and had a nearly $600 million impact on the Missouri economy.

Carhanan stepped down from Wind Capital in January 2012 and went on to found Wind Rose Energy Partners, an international clean energy investment partnership where he currently serves in an advisory capacity.

Mel Carnahan, Tom Carnahan’s father, was Governor of Missouri from 1993 to 2000 and posthumous US Senator-elect (2000).