25 January 2011
Globalance, the sustainable investment private bank set up by responsible investment pioneer Reto Ringger, has received its banking license from Swiss banking authority FINMA and has named its board of directors.
The bank is pursuing what it says is a novel business model focusing on sustainable investments and transparency and is aimed at rich individuals, family offices and foundations.
In an interview with Environmental Finance, Ringger disclosed more details about how the bank will operate. It will only offer third-party investment products, rather than proprietary ones, to ensure that only the best performing and most appropriate products are offered. The bank has built up a database of 1,400 responsible investment products it can recommend to clients, Ringger said.
Globalance will also pass on any third party commissions – which can account for almost a third of the commission paid, Ringger said – back to the client.
Ringger said that, while “not a low-cost supplier”, Globalance is able to keep costs down despite eschewing commission income by outsourcing many of its functions. “We’re starting the bank on a green field – trading, back office, IT etc are all outsourced. We’ve got a low cost base compared to banks with those steps in the value chain in-house.”
The bank will charge an annual management fee of 0.6-1.5% of assets held and, while there is no minimum threshold, clients are likely to place at least SFr 400,000-500,000 ($425,000-530,000) with Globalance, he added.
Ringger said that the bank expects to break even within three to four years, for which it would require SFr 700 million-1 billion in assets under management. The German-speaking high net worth individual market is worth some SFr 180 billion, he said, and noted that a recent study by the European Social Investment Forum found that rich individuals are placing an average of 11% of their portfolios in sustainable investments.
The bank is seeking regulatory approval to operate in the Nordic market, which will take around 12 months. “The Far East is also an interesting market,” Ringger added.
The five-person board of directors comprises:
•Felix Ehrat, chairman, who is senior partner and chairman of the board of law firm Bär & Karrer;
•Thomas Kubr, founder and CEO of Zug-based asset manager Capital Dynamics;
•Joachim Schoss, member of the board of directors of media company Goldbach Group and newspaper group Neue Zürcher Zeitung;
•Diana Strebel, entrepreneur and member of the board of directors of Swiss medicinal herb company Ricola; and
•Louis Graf von Zech, member of the board of directors of BHF-BANK Frankfurt.
Ringger founded Sustainable Asset Management (SAM) in 1995, an investment group that today manages assets worth more than €11 billion ($15 billion). He left in early 2009 after Robeco took a majority stake in SAM.
Mark Nicholls
Monday, 31 January 2011
Advanced biofuels projects win flurry of US loan guarantees
26 January 2011
The US government is stepping up its support for advanced biofuels, with two federal agencies providing loan guarantees worth hundreds of millions, but the sector still faces funding and technology issues that are challenging its ability to scale-up operations.
The US Department of Agriculture (USDA) will offer a $250 million loan guarantee to develop a commercial biorefinery utilising technology developed by Coskata. The USDA’s guarantee will be the largest ever awarded for a biofuel facility and will allow the sponsors to move forward with the financing of the 55 million gallon per year cellulosic ethanol facility in Alabama.
The loan guarantee essentially allows Coskata to begin raising capital for the facility, said Wes Bolsen, chief marketing officer and vice-president of government affairs. The full capital cost will combine the $250 million with a significant amount of equity from investors.
“For any emerging technology, motivating private investment has always been challenging,” he added. “However, the USDA’s $250 million loan guarantee to Coskata is the largest biofuel guarantee that has ever been issued by a federal agency and is a strong signal to the investment community that advanced biofuels will play a significant role in the country’s long-term energy mix.”
The USDA also made a conditional commitment for an $80 million loan guarantee to Enerkem for the construction of a waste-to-biofuels project in Mississippi that will transform municipal solid waste into ethanol. The project, which will provide 10 million gallons per year initially and is expected to go online in 2012, already received an award of up to $50 million from the Department of Energy (DOE) in December 2009.
“We are thrilled with the resounding assurance that we continue to earn from leading government and private investors,” said Vincent Chornet, Enerkem’s president and chief executive officer.
The USDA will also offer a $75 million loan guarantee to INEOS New Planet BioEnergy to construct and operate a Florida biorefinery capable of producing 8 million gallons per year of cellulosic ethanol, using feedstock from vegetative waste (citrus and agricultural wastes), yard wastes, wood waste and municipal solid waste.
The USDA loan guarantee programme was created under Section 9003 of the 2008 Farm Bill to assist in the development advanced biofuel technologies. The loans fund the development, construction and retrofitting of commercial-scale biorefineries.
Meanwhile, the DOE offered its first loan guarantee for an advanced biofuels facility to Diamond Green Diesel, the proposed joint venture between operator Valero Energy Corporation and feedstock supplier Darling International. The $241 million loan guarantee will support the construction of a 137 million gallon per year renewable diesel facility in Louisiana.
Technology problems halt progress for Range Fuels, despite loan guarantee
But loan guarantees are not the panacea for advanced biofuel companies still facing financing and technological challenges. Range Fuels received a USDA loan guarantee last year and closed an $80 million bond issuance to partially finance the first two phases of construction of its first commercial cellulosic biofuels plant using renewable and sustainable supplies of non-food biomass in Georgia. The company had also previously received a $76 million grant from the DOE. But Range Fuels has significantly scaled back and revamped the project and is seeking additional financing.
“We are hopeful that Range Fuels will be able to work through their technology issues, which I think are at the heart of concerns that have been expressed by folks who are interested in investing but just want to be certain that their investment has a good opportunity for success,” said USDA Secretary Tom Vilsack.
In establishing the Renewable Fuel Standard, Congress set a national goal of producing 36 billion gallons of biofuels by 2022. But in setting the annual targets, the Environmental Protection Agency has acknowledged that advanced biofuel production is not scaling up as quickly as expected, setting a relatively low target of 1.35 billion gallons for 2011.
Gloria Gonzalez
The US government is stepping up its support for advanced biofuels, with two federal agencies providing loan guarantees worth hundreds of millions, but the sector still faces funding and technology issues that are challenging its ability to scale-up operations.
The US Department of Agriculture (USDA) will offer a $250 million loan guarantee to develop a commercial biorefinery utilising technology developed by Coskata. The USDA’s guarantee will be the largest ever awarded for a biofuel facility and will allow the sponsors to move forward with the financing of the 55 million gallon per year cellulosic ethanol facility in Alabama.
The loan guarantee essentially allows Coskata to begin raising capital for the facility, said Wes Bolsen, chief marketing officer and vice-president of government affairs. The full capital cost will combine the $250 million with a significant amount of equity from investors.
“For any emerging technology, motivating private investment has always been challenging,” he added. “However, the USDA’s $250 million loan guarantee to Coskata is the largest biofuel guarantee that has ever been issued by a federal agency and is a strong signal to the investment community that advanced biofuels will play a significant role in the country’s long-term energy mix.”
The USDA also made a conditional commitment for an $80 million loan guarantee to Enerkem for the construction of a waste-to-biofuels project in Mississippi that will transform municipal solid waste into ethanol. The project, which will provide 10 million gallons per year initially and is expected to go online in 2012, already received an award of up to $50 million from the Department of Energy (DOE) in December 2009.
“We are thrilled with the resounding assurance that we continue to earn from leading government and private investors,” said Vincent Chornet, Enerkem’s president and chief executive officer.
The USDA will also offer a $75 million loan guarantee to INEOS New Planet BioEnergy to construct and operate a Florida biorefinery capable of producing 8 million gallons per year of cellulosic ethanol, using feedstock from vegetative waste (citrus and agricultural wastes), yard wastes, wood waste and municipal solid waste.
The USDA loan guarantee programme was created under Section 9003 of the 2008 Farm Bill to assist in the development advanced biofuel technologies. The loans fund the development, construction and retrofitting of commercial-scale biorefineries.
Meanwhile, the DOE offered its first loan guarantee for an advanced biofuels facility to Diamond Green Diesel, the proposed joint venture between operator Valero Energy Corporation and feedstock supplier Darling International. The $241 million loan guarantee will support the construction of a 137 million gallon per year renewable diesel facility in Louisiana.
Technology problems halt progress for Range Fuels, despite loan guarantee
But loan guarantees are not the panacea for advanced biofuel companies still facing financing and technological challenges. Range Fuels received a USDA loan guarantee last year and closed an $80 million bond issuance to partially finance the first two phases of construction of its first commercial cellulosic biofuels plant using renewable and sustainable supplies of non-food biomass in Georgia. The company had also previously received a $76 million grant from the DOE. But Range Fuels has significantly scaled back and revamped the project and is seeking additional financing.
“We are hopeful that Range Fuels will be able to work through their technology issues, which I think are at the heart of concerns that have been expressed by folks who are interested in investing but just want to be certain that their investment has a good opportunity for success,” said USDA Secretary Tom Vilsack.
In establishing the Renewable Fuel Standard, Congress set a national goal of producing 36 billion gallons of biofuels by 2022. But in setting the annual targets, the Environmental Protection Agency has acknowledged that advanced biofuel production is not scaling up as quickly as expected, setting a relatively low target of 1.35 billion gallons for 2011.
Gloria Gonzalez
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