Rotterdam launches new € 100 million fund to support expansions that can help make the city more sustainable
Nowadays, countries and organizations around the world are working to promote energy efficient and clean alternatives to fossil fuel based energy systems. The Netherlands is also serious about mitigating CO2 emissions and embracing a circular economy, as it aims to become climate neutral by 2050.
In this regard, the city of Rotterdam, in collaboration with InnovationQuarter, on Thursday launched the Rotterdam Energy Transition Fund. This fund was set up to accelerate the local energy transition and boost the economy.
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Rotterdam Energy Transition Fund
According to the press release, Rotterdam and its port are a cornerstone of the Dutch economy. However, as the region is responsible for 20% of national CO2 emissions, this is a major obstacle for the Netherlands, which has made it their mission to become climate neutral by 2050.
Bernice Notenboom (Climate Journalist), Michael Liebreich (Investor and Founder of Bloomberg New Energy Finance) and Sustainability Councilor Arno Bonte came together to launch the Fund. The event took place on June 3 and was hosted by BlueCity in the old building of the Tropicana Pool.
At the online launch of the Fund, speakers and panel members presented their views on the challenges facing the region and the opportunities to reduce CO2 emissions, improve air quality and reduce the use of primary raw materials.
Purpose of this fund
According to a press release, the € 100 million Energy Transition Fund will accelerate the energy transition by investing in innovative companies that bring about change. It will also help the city to recover from the coronavirus crisis more quickly.
Individual scale-ups can apply for funds between 1 and 10 million euros for projects that strengthen the circular economy and make energy production, infrastructure and use in Rotterdam more sustainable. Projects include large-scale energy storage, electrification of industrial processes and transportation, new plastic recycling technologies and the creation of hydrogen infrastructure.
Rotterdam City Councilor Arno Bonte says: “In Rotterdam we see abundant innovative strength. But we’re also finding that companies often face a lack of proper funding to carry out their business cases. The city council therefore decided to create the Rotterdam Energy Transition Fund. Thanks to the investments of this fund, we can help innovative companies to stimulate technologies that contribute to the reduction of CO2 emissions and to the circular economy in Rotterdam. “
An important condition is that these innovative initiatives do not easily qualify for market funding. This could be due to the risk profile, higher capital requirements or longer payback periods. The expected impact on the business climate and employment also plays a role in successful investment demand.
Rafael Koene, Fund Manager at InnovationQuarter, says: “As fund managers, we place a strong emphasis on a company’s ability to develop technology that will bring substantial improvement to the world of tomorrow. In this regard, as an investor, InnovationQuarter has a long-term vision and an ongoing commitment. The Rotterdam Energy Transition Fund will invest particularly in innovative, capital-intensive companies that find it difficult to receive funding due to higher risks due to technology, capital intensity or time to payback.
The Rotterdam Energy Transition Fund is a revolving fund: the profits from the investments go back to the fund and can then be used for new investments.
30 M € additional
The Rotterdam Energy Transition Fund is part of the “Rotterdam, Onwards Stronger” investment program and is partially funded by income from sales of the energy company Eneco. In addition to € 100 million for scale-ups, the fund contains € 30 million for associations of owners, individuals and SMEs. It is a revolving fund; the profits from the investments flow back into the fund and can then be used for new investments.
In the form of low-threshold loans, the fund stimulates various sustainability measures, such as insulating houses and installing solar panels.
This part of the Rotterdam Energy Transition Fund is managed by SVn (Stimuleringsfonds Volkshuisvesting Nederlandse gemeenten). SVn has experience in managing public investment resources to achieve social goals.
Founded in 2014, InnovationQuarter is the regional development agency for the Dutch province of West Holland. InnovationQuarter finances innovative and fast growing local companies, and helps transnational companies to gain a foothold in this delta region.
InnovationQuarter also facilitates national and international collaboration between forward-thinking entrepreneurs, knowledge institutes and governments. By collaborating with the business world, the agency contributes to making West Holland one of the most innovative regions in Europe.
The agency invests in all types of financing, including equity investments, subordinated and convertible loans for seed, start-up and growth companies. InnovationQuarter derives its investments from 4 funds. These include:
- IQCapital: an 80 M € fund that invests in startups, scale-ups and mature SMEs in West Holland
- UNIIQ: this is a 22 million euro fund created by Erasmus MC, Delft University of Technology, Leiden University and InnovationQuarter. It helps entrepreneurs get through the riskiest phase, from concept to promising business
- ENERGIIQ: a fund from the Province of South Holland of € 35 million to finance the marketing of proven energy innovations to reduce CO2 emissions
- The Rotterdam Energy Transition Fund: it has € 30 million for loans to homeowners associations, individuals and SMEs. In addition, it also has 100 million euros for sustainable investments in scale-ups and large organizations with the aim of reducing CO2 emissions and the use of raw materials and improving the quality of the air.
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