Page 104 - Enhancing innovation and participation in smart sustainable cities
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United for Smart Sustainable Cities
Enhancing Innovation and Participation
Additional cash contributions were made by the LDA in 2010 (GBP 32 million; EUR 37.8 million) and ERDF in 2014
(GBP 10 million; EUR 11.8 million); GBP 1.5 million was generated from interest on ‘idle funds’ and added to LEEF
resources in 2014.
The following funding sources were secured by UDFs to comply with their contractual obligation of finding private
contributors for their funds:
LEEF: Investments from Royal Bank of Scotland (GBP 50 million; EUR 59 million) and INPP (GBP 20
million; EUR 23.6 million).
FEF: Investment from Pension Funds (GBP 25 million; EUR 29.5 million).
GSHF: The fund is linked to an EIB loan (GBP 400 million; EUR 472 million); the LGF contract obliges the
UDF Fund Managers to invest at least 50% of this funding in London-based projects.
All funding sources together provided the LGF with a total of GBP 406.5 million (EUR 479.7) to be invested by 2015.
The fund managed to commit all the allocated funds by investing in more than 15 projects with a value of over
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GBP 500 million . Returns from LEEF and FEF would go to the GLA in 2021; returns from GSHF would go to the GLA
in 2043. The LGF had a leverage effect of 6.77x for EU leverage and 3.70x for public resources.
The existence of European initiatives to financially support green infrastructure investment in the region (e.g.
ERDF, ELENA) was fundamental to making the implementation of the LGF possible. Having an independent
investment board with enough flexibility to steer the process was key for the LGF to ensure its resilience during
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the implementation process; the latter was particularly relevant in 2013 when the third UDF was established .
Close cooperation between parties was essential to overcome the challenges that arise from developing untested
models of financial institutions for infrastructure development.
2.3 Results
By 31 December 2015, the LGF had successfully committed all its allocated funds in more than 15 projects, with a
value of over GBP 500 million (around EUR 588 million). It is important to mention that most projects supported
by the LGF are not yet complete. However, economic and environmental forecasts by the GLA (September 2014)
are promising:
reduction of 214 963 tons of CO2 per annum
creation of over 2 000 jobs
saving of 330 980 tons of waste to landfill per annum.
The LEEF has successfully supported the adoption of energy efficiency measures in more than 70 buildings in
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London by providing debt financing . Highlights from these interventions include the installation of pioneering
energy-saving measures (e.g. waste heat recovery) and retrofit for the Tate Modern and Tate Britain art galleries.
A regeneration project of 15 000 residential units was undertaken in the Greenwich Peninsula. Finance was also
provided for a district heating network that would provide heating and hot water to homes and businesses in the
Lee Valley.
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The FEF has already invested in seven projects . Through its financing, biogas plants will be developed in
Dagenham and Enfield. FEF also supported the development London’s first plastic recycling plant. Located in
Woolwich, it can process around 20 000 tons of post-consumer bags and films annually.
9 Mayor of London (2015).
10 The London Energy Efficiency Fund (LEEF) was initially focused on supporting large-scale decentralized systems and district
heating networks; however due to results from soft market testing and a change to Regulations, LEEF’s focus changed to
retrofitting of public buildings and social housing. Decentralized energy projects could still be funded after case by case
approval of the Investment Board. The third UDF (GSHF) was created to broaden the delivery structure of the fund and
implement energy efficiency measures in social housing.
11 Amber Green (2012).
12 Foresight Group.
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