The Ireland Strategic Investment Fund (ISIF) is poised to play a central role in unlocking investment funds for the developing Irish anaerobic digestion (AD) sector.
The Irish Government’s target is for biomethane to provide 10% of the country’s gas needs by 2030. This will require significant investment to build over 200 AD plants.
Some €53tn (trillion) in finance is estimated to be available globally to invest in renewable energy projects.
While much of this was traditionally targeted at wind and solar projects, there is now a greater shift towards investing in AD plants, according to head of sustainable futures at KPMG Russell Smyth, who spoke at the Gas Networks Ireland event in Dublin last week.
“This momentum has translated into a significant increase in capital targeting the sector, with the number of UK and Irish funds with biomethane appetite increasing from five to nearly 40 in the space of 12 months.
“Ireland’s key challenge is whether it is able to provide the right policy and investment environment to attract this wall of capital, valued at up to €53tn,” he said, referencing the fact that in order to access this “wall of finance” from investors, AD operators need to have long-term price certainty for their biomethane. This is normally done through government policy.
Head of food and agricultural investments at the ISIF Cathal Fitzgerald said that the ISIF could be an enabler in accessing private capital for the AD sector.
He said that ISIF, which is part of the National Treasury Management Agency, can invest and intervene in parts of the economy where capital flows are not currently going.
Cathal explained that part of the State agency’s remit is to bring in capital by being seed investors or funding the provision of cornerstone capital for industries at an early stage.
While food and agriculture is one of the four investment divisions of ISIF, the biomethane sector spans across the divisions of climate and indigenous business too he said.
The total fund size of the ISIF is €9bn and at least €1bn will be put behind climate initiatives, including new sources of green energy.
Fitzgerald said that ISIF would collaborate with industry and investors, and that they would be happy to work with the co-op sector as a platform to aggregate this funding.