The Equitix managed fund, Energy Saving Investments (ESI), in which the UK Green Investment Bank (GIB) is a cornerstone investor, has today announced an investment of £576,733 for the financing of the installation of a biomass boiler at Tomatin Distillery near Inverness.
This £1.2 million investment, GIB's first in Scotland, mobilises a further £600,274 of investment from the Equitix Energy Efficiency Fund (EEEF).
The investment is being made by ESI in partnership with Balcas Limited, a leading UK manufacturer of wood pellet biomass.
The ESI fund forms part of GIB's allocation of investment into one of its priority sectors, energy efficiency.
GIB awarded the competitive fund mandate to Equitix to invest £50 million, matched by private investors, to drive investment in small-scale low carbon infrastructure requiring less than £30 million of financing. Equitix has also established EEEF to make investments into the energy efficiency sector, including as co-investors alongside ESI.
The boiler installation at Tomatin Distillery, located 16 miles south of Inverness, produces steam utilised in the production of whisky. The boiler, manufactured by a leading European manufacturer, replaces a high maintenance, inefficient oil fired boiler. The new boiler will replace 80% of the heat load usually generated by the oil fired boiler.
The boiler will be fuelled by sustainably sourced wood pellet fuel and as a result, CO2 emissions are expected to be cut by over 96,500 tonnes over the 20 year life of the investment. In addition to supporting the green economy and reducing carbon emissions, switching to a biomass boiler will save Tomatin a significant amount on their energy bills.
It will use sustainable EN plus A1 Standard pellets, manufactured by Balcas using renewable electrical and thermal energy and raw materials sourced from local, sustainably managed forests by Balcas at their plant at Invergordon. This will provide local jobs and support the local supply chain.
The whisky produced at the distillery is used in a range of blends and its single malts are currently sold in over 40 export markets. The site has been distilling whisky since the 15th century.
Shaun Kingsbury, UK Green Investment Bank chief executive officer said:
I am pleased to be able to announce our first Scottish investment. As well as significant emission reductions, the project will provide a boost to the local economy. We have a strong pipeline of investments in Scotland and hope to be able to announce further investments in Scottish distilleries, as well as other projects, very soon.
Geoff Jackson, Equitix chief executive officer said:
This is the second deal that Equitix has closed in which GIB has invested with the Equitix Energy Efficiency Fund as the private sector co-investor. We are pleased to be able to add a positive economic and environmental impact to this area in Scotland. Equitix continue to source a pipeline of high quality opportunities for investment by GIB and expect to deploy further capital in this region in the near future.
The Secretary of State for Scotland Michael Moore said:
The first Scottish deal is a landmark moment for this ground-breaking Edinburgh-headquartered institution. It demonstrates that combining Scotland's expertise in the financial and green sectors with a strong transaction team in London, can deliver significant benefits for businesses and local communities across Scotland.
With the Bank confident that more Scottish investments will be announced in the near future, I am certain that UKGIB will play a hugely important role in realising Scotland's enormous green energy potential, ensuring that we are at the centre of the UK's low carbon economy.
The Secretary of State for Business, Innovation and Skills Vince Cable said:
The whisky distillery has always used a perfect blend of innovation and tradition. Today's investment from the Green Investment Bank, funded by the UK Government, will continue this proud tradition. By funding a new biomass boiler, we are helping Tomatin to become more energy efficient and high-tech. This money will also help secure local jobs and support the local supply chain. Despite tough international conditions, whisky exports have done very well. The industry is to be applauded for its achievements. I want to make sure we continue its success as we rebalance the economy and create wealth outside of the south east of England.
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Notes to editors
- The ESI fund forms part of GIB's allocation of investment into Non-Domestic Energy Efficiency (NDEE), one of its priority sectors. GIB awarded the competitive mandate to Equitix to invest £50 million, matched by private investors, to drive investment in small-scale low carbon infrastructure requiring less than £30 million of financing per project.
- The UK Green Investment Bank was launched in November 2012. With £3.8 billion of funding from the UK Government, it is the first bank of its kind in the world. It is a "for profit" bank, whose mission is to accelerate the UK's transition to a greener economy, and to create an enduring institution, operating independently of Government.
- Equitix is a company established to deliver and manage infrastructure projects from bidding and closing through to construction and service provision. Its reputation is built upon strong relationships with its clients and partners, as well as a committed approach to every project in which they are involved and investment they make.
- Balcas is the largest manufacturer of wood pellet fuel in the British Isles. It will supply the Tomatin distillery from its plant at Invergordon, Ross-shire. At Invergordon biomass is combusted in a Combined Heat and Power (CHP) plant, and the emerging steam is condensed to drive an electrical generator. The residual heat is used to reduce the moisture content of locally sourced woodfibre that is processed into high-energy fuel pellets. All of the electrical and thermal energy used in the process are therefore from renewable sources. Balcas' wood pellets that are marketed under the company's "brites" brand, providing energy to displace 100 million litres of oil per year, reducing carbon emissions by 300,000 tonnes.
- The Tomatin Distillery Co Ltd is a producer and blender of Scotch whisky, boasting a strong core range of single malt whiskies along with a range of popular blends. The Visitor Centre, which hosts 20,000 visitors per annum, received a £150,000 upgrade in 2011 which resulted in an upgraded star rating to 4* from Visit Scotland. The distillery was established in 1897, and while historically the whisky produced was primarily sold for use in other brands of blended whisky, the company is now very focussed on growing the Tomatin single malt brand in its own right. The company's most popular blends are The Antiquary, The Talisman and Big 'T' The distillery is owned by Japanese company Takara Shuzo.