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Scottish Equity Partners (SEP) sets up £9m investment fund for energy schemes

UK venture capital firm Scottish Equity Partners (SEP) has set up a £9m investment fund for UK-based low-carbon heat projects.

The heat project fund will be called Ardor Energy and will be overseen by SEP's Environmental Capital Fund.

Ardor will fund a pipeline of diversified, small–scale heat and combined heat and power (CHP) projects across the UK over the next two to three years.

Ardor will work with its partner, Sustinere Solutions (SustinereUK), a sustainable infrastructure and renewable energy development business to procure, install and maintain biomass and gas boilers and CHP projects across a wide range of properties including multi-occupancy housing, care facilities, leisure centres and hotels under long-term energy supply agreements.

The SustinereUK team has significant sector experience having successfully delivered a number of biomass and other renewable projects from design and finance through to delivery and aftercare.

Peter Bachmann, director at SEP, said: "If the UK is to meet its requirements under the EU Renewables Energy Directive, DECC predicts that the country will need to increase significantly its renewable heat usage from 2% to 12%.

"There is a significant market opportunity in helping transition the UK to low-carbon heating solutions. SEP's investment in Ardor will facilitate the roll out of a number of low-carbon heat driven projects across the country."

The first Ardor heat project is for Galliford Try subsidiary, Linden Homes, at the former St Clements Hospital site in Bow, London with all 252 homes purchasing heat from a central energy centre and district heat network.

The project will provide heat directly to homeowners, which include some social and affordable housing customers, via a long-term heat supply agreement and will use a dual-fuel biomass pellet and gas boiler system provided and maintained by Ardor.

Bachmann said: "Overcoming the complexities inherent in a multi-occupancy development such as St Clements, through the Ardor structure, demonstrates the added value SEP can bring to projects in the heat sector. We believe the Linden Homes project will act as an attractive template for heat and energy provision as a service for multi-tenant housing developments across the UK."

Wood Energy has been selected by SustinereUK for Ardor as its installation and long-term O&M partner, with the project due to commence heat supply in February 2016.

Further renewable energy developments with care groups and housing associations are being progressed and will be announced shortly.

Steve Wilkinson, managing director of SustinereUK, said: "Interest in biomass and gas fired CHP systems is increasing and we have an exciting pipeline of potential projects which Ardor, with financial backing from SEP, can help deliver."

Ardor will generate income from heat sales as well as through the Renewable Heat Incentive (RHI), the Government's environmental programme that provides financial incentives to increase the uptake of renewable heat.