Progress Report 2022

GIG balance sheet

Lifetime green impact metrics

Reduction of greenhouse gas (GHG) emissions

Generation of renewable energy

Energy demand reduction

Recycling of materials (note 1.a)

Avoidance of waste to landfill (note 1.a)

Energy storage capacity 

GIG balance sheet: Notes on the statements 

YEAR-ON-YEAR CHANGES TO ESTIMATED LIFETIME GREEN IMPACT

The table on the following page shows how the lifetime green impact at the end of 2021/22 compares to that at the end of 2020/21, and provides a breakdown of the changes. In summary, these changes in lifetime green impact were caused by:

1. Adjustments/corrections to prior reporting period

a. The project Avertas (energy from waste, Australia) has been reviewed and it has been determined that the project, although meeting the requirements of the Green Investment Policy, was not, at any point, in GIG’s portfolio and had been developed solely by Macquarie Capital. As such, it has been deemed to be ineligible for continued Green Impact Reporting by GIG and has, therefore, been removed from the green impact statements. 

b. Non-material corrections:

• GIG’s approach to green impact allocation for projects acquired when already operational has been amended to align with the attribution factor for equity investment in private companies defined in the PCAF Global GHG Standard. The new methodology is detailed in GIG’s Green Impact Reporting Criteria. This adjustment has affected the green impact estimates of leveraged assets that were acquired as operational.
• Investments made in the prior reporting period but had been erroneously omitted from last year's report as GIG invested in and developed these assets beyond FID, which is the milestone for securing the project’s financing prior to construction and the point at which projects are reported in the green impact statements. These include a portfolio of solar projects in the US (Calibrant), a portfolio of solar projects in India (Vibrant Energy) and a solar project in the UK (Nottingham, Cero C&I).
• One investment (Markbygden) had an incorrect GHG emissions conversion factor applied. This has been corrected to align with the project’s commercial operations date. For more information on how the GHG emissions conversion factor is applied, please see the GIG Green Impact Reporting Criteria.
• Impact data reported in last year’s report was amended where new information was received to indicate a correction was required, such as a correction to a forecast.

2. New investments

a. Projects incorrectly categorised as new investments in last year’s report (Cero C&I)

b. New investments made in this period. These include solar projects (Telcontar, India; Pontinia, Italy; PGP2, Malaysia; Nonthaburi, Thailand; Brighouse and Larks Green, UK; Halliburton, Javits Hybrid, South Portland and Lena Winslow, US), battery storage projects (Hazelwood, Australia; Maldon, UK) and an onshore wind project in Poland (Radzyn).

3. Existing projects’ variation of performance/reforecasts from last year forecasts 

• Where project performance varies >10 per cent from forecasts, GIG takes an average of past performance and, where relevant, pre-operational forecasts to estimate the remaining lifetime green impact.
• Adjustment of forecast green impact due to an update to the IFI greenhouse gas baseline. The baseline used for evaluating greenhouse gas reduction from renewable energy projects and energy efficiency projects is defined by the IFI Harmonization of Standards for GHG Accounting. This baseline was updated on 1 December 2021 and so all projects that commence operations after this date adopt the latest version (v3.2) dataset. To provide an accurate reflection of GIG’s expected impact, the greenhouse gas reduction from GIG’s investments as of 2020/21 has been re-estimated. 
• Earls Gate (energy from waste project, UK) had a permit increase, resulting in an increase to the waste throughput forecast and a consequent increase in green impact.

4. GIG is aware of the sustainability concerns raised regarding the biomass feedstock supply to Drax Power Station (‘Drax’) by the BBC programme ‘Panorama’ in October 2022. In 2012, the UK Green Investment Bank committed to a defined use-of-proceeds corporate loan to Drax to finance the conversion of three of six coal-fired units at Drax to 100% biomass. Upon refinancing of the loan, the loan facility was terminated and repaid in 2017. As the loan was provided at FID, in line with the GIG Green Impact Reporting Criteria, GIG reported 100% of the total estimated lifetime green impact, and continues to report this in the Green Impact Statements (under “Estimated lifetime GHG emissions reduction of all investments to date”). Drax’s estimated lifetime green impact makes a material contribution to GIG’s reported green impact from all investments to date, estimated at 27% of GIG's reported lifetime green impact, and therefore the allegations made in the Panorama programme are materially relevant to GIG’s reported green impact metrics. As such, we have reviewed relevant information including the allegations themselves, Drax’s public responses and the sustainability safeguards that had been put in place during the time of GIG’s investment. We have concluded that there is not sufficient evidence for us to believe that the reported estimated lifetime green impact for the project is materially incorrect.

Funds

MGREF1 and MGREF2 lifetime green impact metrics

Reduction of greenhouse gas (GHG) emissions