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Profile Winter 2009 Newsletter

Collaboration is key to environmental sector growth 

Greater collaboration between the regional gap-financing community, businesses and enterprise stimulating initiatives is needed to support growth in the region’s environmental sector.

The findings come from a piece of market research commissioned by South Yorkshire Investment Fund into the regional investment needs and trends for the environmental technology and cleantech sector.

The research was carried out by sustainability specialist Frances Wells of the Sheffield based consultancy FWA.

Environmental technologies include waste management, land remediation and end-of-pipe clean-up, while cleantech addresses global environmental challenges, including renewable energy generation and management, resource efficiency and advanced materials.

Yorkshire Forward is the first regional development agency to set a regional carbon reduction commitment, set at 25 per cent of 1990 levels by 2016, and to de-couple economic growth from carbon emission rates.

The transition towards a lower carbon economy is part of Yorkshire’s drive for competition and has identified environmental technology and cleantech, which has a global market of £3trillion, as a priority sector.

The market research assessed the issues and processes facing businesses in being able to access finance and the involvement of intermediaries, who support them in growth, whether sign-posting financial products or providing professional support.

It observed start-up businesses in the cleantech sector typically develop through distinct phases, starting with the ‘proving technology’ stage, when they are likely to access grants and seedcorn support from within the region.

The next stage is centred on ‘proving the market’ and to ultimately attract commercial investment with which to transform the business and take full advantage of market opportunities.

This phase is found to be the most critical and can last for five to ten years, there are many stumbling blocks and specialist sector business expertise is crucial. Ensuring such expertise is available in the region needs to go hand-in hand with provision of the right kinds of finance.

In light of the report’s findings, recommendations included:

  • Regional funds and key sector players to collaborate more closely to align their strategies and resources to help draw in more investment to the region 
  • Further development of packages of resource and assistance to get sector businesses to commercial investor readiness and beyond, and a review of how these could be efficiently provided and afforded within the region
  •  A review of the need and viability of a highly visible, named and dedicated fund tailored to the sector, which could make larger equity investments (£3m-5m) over longer than usual time periods.

The findings will be used to support future investment from the regional successor fund, Finance Yorkshire, which is set to be launched at the start of 2010.

For more information about South Yorkshire Investment Fund, please visit www.syif.com or ring 01709 386377 

Editor's Notes

About South Yorkshire Investment Fund

South Yorkshire Investment Fund  provided seedcorn, loan and equity linked investments, ranging from £15k to £2.5m, specifically to help small and medium businesses meet the gaps in funding they need for growth and development.

Created as part of the Objective 1 programme, the Fund is a private and public sector business finance provider. The European Regional Development Fund and Yorkshire Forward are investors in the Fund.

South Yorkshire Investment Fund also provided access to Business Angel investments from the Yorkshire Association of Business Angels and Microloans through BiG Business Loan Fund and Donbac Microloan Fund.

Finance Yorkshire has now taken on responsibility for providing gap finance in Yorkshire and the Humber.
http://www.finance-yorkshire.com

For further details please contact Suzanne Tinkler,  on 0845 649 0000.

South Yorkshire Investment Fund Ltd is a company limited by guarantee (Registered No 3936065). South Yorkshire Investment Fund comprises three sub funds, the South Yorkshire Investment Capital Fund, the South Yorkshire Investment Development Fund, which are each managed by YFM Venture Finance Limited, and the South Yorkshire Investment Small Business Fund, which is managed by Finance South Yorkshire Ltd. YFM Venture Finance Limited (Tel 0113 294 5000) and Finance South Yorkshire Ltd (Tel 01709 386 377) are each authorised and regulated by the Financial Services Authority. South Yorkshire Investment Fund also provides a number of services, which are not regulated by The Financial Services Authority. These include the pilot Seedcorn Fund, BiG Business Loan Fund, Mentorbank and access to the Donbac Microloan Fund. BiG Business Loan Fund is managed by Donbac Ltd (company registration No. 01925556) and Key Fund Yorkshire Ltd (Tel 0114 242 8900).