Financial and insurance services

Tender description

The Greater London Authority (the ‘GLA’ or ‘Contracting Authority’) is seeking to enter into a contract with a Fund Manager to manage and invest by way of loans (senior, junior or mezzanine) and equity investment, the capital which is to be committed to a new fund, which the winning bidder will establish and which will be called the Mayor of London's Energy Efficiency Fund MEEF (the ‘Fund’). The Contracting Authority is not specifying any particular legal structure for the Fund. It is envisaged that 90 % of the capital will be invested by way of loans and no more than 10 % by way of equity. The Fund will be established to invest in technologies relevant to energy efficiency such as: — Building retrofit and energy efficiency measures in public, commercial and residential properties; — Production and distribution of low carbon energy, including combined heat and power, tri-generation and communal / district heating generation and/or networks; and — Small scale renewable energy generation. The Greater London Authority (the ‘GLA’ or ‘Contracting Authority’) is seeking to enter into a contract with a Fund Manager to manage and invest by way of loans (senior, junior or mezzanine) and equity investment, the capital which is to be committed to a new fund, which the winning bidder will establish and which will be called the Mayor of London's Energy Efficiency Fund MEEF (the ‘Fund’). The Contracting Authority is not specifying any particular legal structure for the Fund. It is envisaged that 90 % of the capital will be invested by way of loans and no more than 10 % by way of equity and bids must be submitted on this basis. The contract for the Fund can include provisions to allow for loans to increase to up to 100 % of the capital with consent from all investors in the Fund. The Fund will be established to invest in technologies relevant to energy efficiency such as: — Building retrofit and energy efficiency measures in public, commercial and residential properties; — Production and distribution of low carbon heat, including combined heat and power, tri-generation and communal / district heating generation and/or networks; and — Small scale renewable energy generation. The Fund Manager is required to make the investments and then administer the Fund, including monitoring and managing drawdowns (see the Specification for further information) The Fund Manager must ensure that all investments are made in a State Aid compliant manner and are in accordance with all applicable laws. The Contracting Authority will initially allocate up to £43m of European Regional Development Fund (ERDF) to the Fund. This initial allocation may be increased, by an additional amount of public money not exceeding £75m, during the life of the Fund. This could come from further ERDF (or other public resource) monies, returns from the existing London Green Fund (in which GLA invested) or other GLA resources. The ERDF and returns from the London Green Fund (LGF) allocated to the Fund will be on terms analogous to an equity investment but other resources from the GLA may be invested in other forms. The European Investment Bank (EIB) has provisionally indicated a willingness to provide up to 100 000 000 GBP of senior debt financing to the Fund, subject to its own due diligence including on the selected Fund Manager, and internal approval processes. It is the intention of the GLA to consult with the EIB throughout this procurement exercise to help in this regard. The term of the EIB loan is expected to be in line with the life of the Fund and EIB's contribution will rank senior to the ERDF. The Fund Manager will be required to invest at least 1 % of the Fund's initial capital (£143m, assuming the EIB invests) from its own cash resources to ensure that their interests are aligned with those of the GLA's. Additional funding from other investors (including banks and other institutions), and/or project promoters of at least 260 000 000 GBP European company must be secured by the Fund Manager, at the underlying project levels and/ or, where possible, at Fund level. At least 60 % of the total additional funding secured should be from private sector sources. At least 43 000 000 GBP of additional funding secured must be eligible to be used as match funding for ERDF. It is envisaged that the duration of the contract with the Fund Manager, i.e. the winning tenderer, will be 20 years. The contract will specify an investment period which will terminate approximately 5 years from the point the contract is awarded to the Fund Manager and a post investment period which will commence from the end of the investment period and will end on the termination date of the contract i.e. 20 years from the commencement date of the contract. Please refer to section II.2.11 for information regarding options to extend. Please refer to the procurement documents for a further description of the procurement, in particular the Specification document.