July 30 (Bloomberg) -- Lloyds Banking Group Plc, the U.K.’s second-biggest state-backed lender, said at least a third of the 1 billion pounds ($1.6 billion) it pledged for infrastructure projects will probably be lent to renewable energy facilities.
The bank will back projects under the government’s National Infrastructure Plan that began in October 2010, London-based Lloyds said today in an e-mailed statement. The funds were first announced in its half-year results on July 26, the bank said.
The state plan is seeking to support the British economy by improving transport, energy and communication networks. The government, trying to raise public and private investment, has singled out power generation and renewables as a growth area.
Lloyds is studying eight or nine social and economic infrastructure projects, two or three conventional power facilities and 11 or 12 clean energy projects, Chris Heathcote, global head of project finance at the bank, said today by phone. It hopes to invest all the money within 18 months.
Infrastructure “is an asset class we like, they are very stable assets and although they aren’t the highest paying assets available, their track record during the global financial crisis was very strong so we see them as a low risk, renumerative asset class,” Heathcote said.
Britain has a target to get 15 percent of its energy from renewables by 2020. Electricity from clean sources accounted for 9.4 percent of generation in 2011 and 3.8 percent of energy consumption, according to the government.
The bank has backed on- and offshore wind farms, solar projects and biomass facilities in the past and is “open” to investing in these areas, said Heathcote.
“The areas that seem to be doing the most at the moment are offshore wind, including the off-take connections, and biomass is looking interesting, but I’m slightly cautious as it’s still early days for biomass,” he said.
To contact the reporter on this story: Louise Downing in London at email@example.com
To contact the editor responsible for this story: Reed Landberg at firstname.lastname@example.org