Foresight completes trio of cleantech investments

The UK venture capital firm Foresight Group completed three new cleantech investments totalling GBP14 million, boosting its position in the sector.

The first investment of GBP 5 million in Yorkshire-based Land Energy, will fund the development of wood pellet production plants.  Each plant will source wood from local forests, delivering renewable fuel in the form of wood pellets to schools, homes and offices in the area, helping them lower their carbon impact.  

Although wood is not a new fuel for heating, its value as a renewable resource has just begun to be recognised. In Germany, for example, wood pellet consumption has risen ten-fold in the last four years because pellets are both easy to use and economical.

“Land Energy fits our vision of a business that helps the environment while offering attractive returns to investors. We are working with the company to roll-out the concept to three regions of the UK. We strongly believe that local sourcing of wood pellet fuels will gain popularity in the future as people start to count the rising financial and carbon costs of transporting fuel,” said Matt Taylor, a Partner of Foresight Group.

The second investment sees Foresight is putting GBP6 million into AWP Environmental, a company that aims to reduce the amount of potentially dangerous industrial wastes, such as used oil, paints and inks, which are sent to landfill.  

Over five million tonnes of such hazardous waste is sent to landfill or incinerators in the UK every year. AWP specialises in the collection and safe disposal of these materials and is believed to be the first such business to adopt a zero emissions policy. The company now plans to convert waste materials into electricity using an advanced gasification technology that avoids harmful emissions. The development of the new plant in Tockwith, Yorkshire will cost approximately GBP18 million and will supply enough electricity to power around 6,000 homes.  

Completing the trio of new investments is Lynwood, a company which collects off-cuts and waste materials from manufacturers of a variety of plastic products and remoulds this material into other products. The company has developed an outdoor furniture range that neither rots nor needs painting, and has is working on the replacement of wood in construction.

Lynwood is Foresight’s second foray into plastics recycling, building on its investment in the plastic-bottle recycler, Closed Loop.  Foresight has agreed a GBP3 million cash injection which will enable the company to more than double production capacity and fund its expansion across the UK.  

Andrew Page, the Foresight partner responsible for the firm’s investments in Lynwood and Closed Loop, commented: “Landfill just isn’t an option any more for valuable wastes of this sort. Lynwood’s expertise in plastics sourcing and blending positions the company as a leader as the industry moves from waste to re-using valuable materials.”

Bernard Fairman, Managing Partner and Founder of Foresight, said, “These investments follow the successful raising of Foresight’s GBP 22 million fund at the end of 2007, which continues to see very strong deal flow and is already more than 40 percent committed.  The environmental infrastructure market is developing very quickly, as we predicted when we launched the fund, and we are seeing a wide range of interesting deals across the infrastructure space.”