Joule Plans $150 Million Fund for Companies to Cut Energy Waste

(Bloomberg) — Joule Assets Inc. plans to raise 100 million
pounds ($150 million) by the end of the year to invest in U.K.
companies that help businesses and homeowners curb energy waste
and cut bills.

The company is raising an initial 5 million pounds for its
so-called SmartCity Enterprise Investment Scheme portfolio and
will channel this into four or five businesses, Joule Assets
Europe Chairman Jessica Stromback said in an interview in
London. EIS funds are backed by the U.K. government and offer
tax breaks to investors in “higher-risk” companies.

There are “pockets of value” within the U.K. energy
market that haven’t yet been exploited, she said. There is a
push to save power, to use clean sources of supply and an
awareness that efficiency measures can cut bills, Stromback
said. The nation’s market is open, where both businesses and
customers can directly benefit from savings, which is “unique”
among European countries.

Homes and businesses are installing energy-efficiency
measures that include low-energy lighting and insulation to
reduce bills by avoiding waste and boosting productivity. The
International Energy Agency in October said investments in
efficiency are overtaking wind and solar spending, reaching at
least $310 billion a year.

Joule is working with Quantum Origination Ltd., which
provides advice to businesses, to find companies that help
customers optimize energy use across a city’s infrastructure.
That includes lighting, buildings, renewable energy and
transport.

Business Profile

“Our proposition is unique because we will provide equity
finance for companies through the EIS that they can use to fund
commercialization and growth, and through Joule we’ll then also
provide debt that they can invest directly in projects,”
Stromback said. “We’re targeting electricity sales companies
that create an ecosystem for customers, providing advice and
information technology systems allowing them to optimize their
use of renewable energies and energy efficiency.”

The fund is currently looking at businesses that help towns
install efficient lighting, operations that help industrial
complexes to optimize their consumption through measures such as
efficient refrigeration, and companies that help cut bills for
low-income housing. It’s targeting returns of at least 30
percent, Stromback said.

Venture-capital investment in smart technologies such as
intelligent power grids and energy efficiency reached $392
million in the first quarter, 32 percent more than the previous
three months, Mercom Capital Group LLC said in a report
Wednesday.

Joule plans to use the fund as leverage to start a similar
Europe-wide vehicle that will also be about 100 million pounds
in size. It wants to start the fund next year, Stromback said.

To contact the reporter on this story:
Louise Downing in London at
ldowning4@bloomberg.net

To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Ana Monteiro, Randall Hackley

About BloombergNEF

BloombergNEF (BNEF), Bloomberg’s primary research service, covers clean energy, advanced transport, digital industry, innovative materials and commodities. We help corporate strategy, finance and policy professionals navigate change and generate opportunities.

Available online, on mobile and on the Terminal, BNEF is powered by Bloomberg’s global network of 19,000 employees in 176 locations, reporting 5,000 news stories a day.
 
Sign up for our free weekly newsletter →

Want to learn how we help our clients put it all together? Contact us