Independent global private asset management firm Capital Dynamics has received a major investment to help develop the UK clean energy sector.

Border to Coast Pensions Partnership, the largest Local Government Pension Scheme (LGPS) pool, has committed £48.5 million to Capital Dynamics’ Clean Energy UK Fund. The investment will support the construction of several new renewable energy infrastructure projects, including four onshore wind investments in Scotland. Once completed, these will have a combined capacity of 193MW.

Capital Dynamics’ Clean Energy UK Fund invests in renewable energy projects, with a large focus on onshore wind and solar developments. The fund secures long-term power purchase agreements (PPAs) in order to boost investment returns. Capital Dynamics currently owns 30 projects with a combined capacity of over 560MW.

“Capital Dynamics offers not only a strong investment opportunity but also the ability to have a tangible impact on the future pipeline of renewable energy infrastructure that the UK sorely needs if it is to reduce its reliance on oil and gas and meet net zero goals.” said Joe McDonnell, chief investment officer, Border to Coast Pensions.      

Barney Coles, co-head of Capital Dynamics Clean Energy, added that the firm was “delighted” about the collaboration, adding that by engaging in the collaboration “Border to Coast continues its leadership in supporting the UK’s transition to a net zero energy system”.

Pension funds are key to UK clean energy growth

Pension funds are some of the largest investors in the UK’s renewables sector, and their impact is set to grow in the coming years.

A report by specialist investment manager AlphaReal in April of this year found that the vast majority of UK pension funds will increase their sustainable investment contributions over the next five years. Of the pension funds surveyed, 35% plan to increase their investments in renewable energy by up to 10%, 44% said they would raise their investments by 10% to 20%, and 16% plan to increase their investments by more than 20%.

However, some feel that pension funds need more support to encourage investment into the renewable energy sector. A collaborative report by some of the UK and Australia’s largest pension fund managers called on the UK government to improve its renewable energy development policies. Specifically, the report asks that the UK government take “an active and coordinated approach across fiscal, planning, climate, renewables and industrial decarbonisation policy to give investors of pension capital greater clarity and confidence in the UK market.”