Capital Dynamics Selected by the UK’s Largest Government Pension Fund to Invest in Clean Energy Infrastructure
14 NOV, 2024
Capital Dynamics, a global independent private asset management firm, announced that the Border to Coast Pensions Partnership ("Border to Coast"), the largest local government pension scheme in the UK, has committed £48.5 million to its Clean Energy UK Fund. This marks the inaugural investment within Border to Coast’s innovative UK portfolio on behalf of its partner funds, aiming to finance the construction of new renewable energy infrastructure, including the fund's first onshore wind projects in Scotland. These projects, with a combined capacity of 193 MW, are expected to supply energy to 46,000 homes once completed.
Clean Energy Investment to Advance UK’s Net Zero Objectives
The £48.5 million commitment by Border to Coast will help the UK transition toward clean energy by supporting the construction of new infrastructure aimed at reducing the country's reliance on fossil fuels. Joe McDonnell, Chief Investment Officer at Border to Coast, emphasized the fund’s dedication to impactful investments that align with the UK’s zero-emission goals. “From the outset, our UK initiative has been focused on creating value by financing new infrastructure, and this commitment embodies that vision. Capital Dynamics offers not only a solid investment opportunity but also the capability to make a tangible impact on the renewable energy infrastructure the UK urgently needs to achieve net zero emissions.”
Barney Coles, Co-Head of Capital Dynamics Clean Energy, echoed McDonnell’s sentiments, expressing excitement about Border to Coast’s support of the UK’s energy transition through its UK Opportunities strategy. Coles noted that Border to Coast joins other global institutional clients in the Clean Energy UK Fund, positioning itself as a leader in supporting the UK’s move toward a net-zero energy system.
Clean Energy UK Fund: A Strategic Focus on Renewable Energy Projects
Capital Dynamics’ Clean Energy UK Fund focuses on renewable energy projects, particularly onshore wind and solar initiatives. Each project under the fund secures long-term, fixed-price power purchase agreements (PPAs) to ensure stable returns with substantial downside protection. Prominent UK pension funds, such as Strathclyde Pension Fund and Merseyside Pension Fund, have joined the initiative, recognizing the potential for risk-adjusted, long-term returns while actively supporting the UK’s energy transition.
Since 2010, Capital Dynamics has been a key player in the UK clean energy sector, with direct investments in 30 projects amounting to over 560 MW of combined capacity. Beyond increasing clean energy capacity and reducing carbon emissions, these projects have positively impacted local communities, contributing £242,000 to local causes in 2023 through wind and solar assets.
As one of the early signatories of the United Nations’ Principles for Responsible Investment (UNPRI), Capital Dynamics has established itself as a leader in responsible investment, achieving top UNPRI ratings across multiple categories, including a 5-star rating for its Clean Energy division. Further cementing its reputation, the Clean Energy and Infrastructure VIII SCSp Fund (“CEI VIII”) achieved sector leader status and nearly perfect scores in the 2024 Global Real Estate Sustainability Benchmark (GRESB) assessment.
