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Climate journalist Bernice Notenboom, investor and founder of Bloomberg New Energy Finance Michael Liebreich and city councillor for sustainability Arno Bonte were always going to draw a crowd, even online. Their passionate contribution to the launch of the Rotterdam Energy Transition Fund, a collaboration between InnovationQuarter and the City of Rotterdam, helped make the launch event of the fund a big success.

The online kick-off on Thursday, 3 June was hosted by BlueCity at the former Tropicana swimming pool building – the beating heart of circularity in Rotterdam since 2015. Along with the keynote speakers who all have proven track records as innovators in energy transition and the circular economy, an entrepreneurs’ panel was also in attendance. The members’ backgrounds in the field of recycling, new technologies for offshore solar energy and biochemistry made for an interesting and diverse programme. 

Cornerstone but obstacle

Rotterdam and its port are a cornerstone of the Dutch economy. However, as the region is responsible for 20 percent of national CO2 emissions, it presents a significant obstacle for the Netherlands on the road to becoming climate neutral by 2050. During the online launch of the Rotterdam Energy Transition Fund, speakers and panel members presented their views on the challenges facing the region and the opportunities for lowering CO2 emissions, improving air quality and reducing the use of primary raw materials.

Dual purpose

Fund manager InnovationQuarter and the City of Rotterdam envisage a two-pronged approach: the €100 million Energy Transition Fund will accelerate the energy transition by investing in innovative businesses that drive change; it will also help the city recover faster from the coronavirus crisis. Scale-ups, in particular, can request co-financing of between €1 million and €10 million for projects that strengthen the circular economy and make energy generation, infrastructure and usage in Rotterdam more sustainable.

Arno Bonte, Alderman Sustainability, city of Rotterdam, says: “In Rotterdam, we see abundant innovative strength. But we also see that companies often face a lack of appropriate funding to realise their business cases. The city council has therefore decided to establish the Rotterdam Energy Transition Fund. With investments from this fund, we can help innovative companies boost technologies that contribute to CO2 reduction and the circular economy in Rotterdam.”

Most important condition for financing

Examples of promising projects include large-scale energy storage, electrification of industrial processes and transport, new technologies for recycling plastic and creating an infrastructure for hydrogen. An important condition is that these innovative initiatives do not readily qualify for market funding. This could be due to risk profile, higher capital requirements or longer payback periods, for example. The expected impact on the business climate and employment also plays a role in a successful investment application. 

Rafael Koene, Fund manager Rotterdam Energy Transition Fund at InnovationQuarter, adds: “As fund managers, we place a strong emphasis on whether a business can develop a technology that will make a substantial improvement to the world of tomorrow. In this respect, as an investor, InnovationQuarter has a long-term focus and an ongoing commitment. The Rotterdam Energy Transition Fund will particularly invest in innovative, capital-intensive companies that struggle to receive funding due to higher risks because of the technology, capital intensity or return on investment timescale.”

The Rotterdam Energy Transition Fund is a revolving fund: profits from investments flow back into the fund and can then be used for new investments.

An additional €30 million

The Rotterdam Energy Transition Fund is part of the ‘Rotterdam, Onwards Stronger’ investment programme and is partially financed from the sales revenue of energy company Eneco. In addition to €100 million for scale-ups, the fund contains €30 million for owners’ associations, private individuals and SMEs. In the form of low-threshold loans, the fund stimulates various sustainability measures, such as home insulation and the installation of solar panels. This part of the Rotterdam Energy Transition Fund is managed by SVn (Stimuleringsfonds Volkshuisvesting Nederlandse gemeenten). Like InnovationQuarter, SVn has extensive experience in the management of public investment resources to achieve social objectives.