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HM Treasury launches search for fund manager of £400 million EV charging fund

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The search is on for a fund manager to manage the UK’s £400 million electric vehicle (EV) charging infrastructure investment fund (CIIF) after the Treasury launched a request for proposals via the Infrastructure and Projects Authority (IPA).

First reported in April when the IPA told Current± it was preparing to launch the call, preparations for the CIIF are officially underway with the request for proposals outlining the government’s plans and requirements.

The aim of the fund is to ‘catalyse’ the rollout of EV charging infrastructure by providing greater access to finance on a commercial basis. On top of 50% of government funding up to £200 million to be used, the fund manager, or managers, selected will be responsible for raising an additional £200 million in private capital and managing the entire fund.

Speaking today to launch the request, exchequer secretary to the Treasury Robert Jenrick said: “Crucial to encouraging the take-up of [EVs] across the country is increasing people’s access to charging points. We want to scale up at pace and ensure interoperability for ease of use.

“This fund is a vital step in our mission to change the way we travel, create new jobs and protect our environment for future generations.”

The chosen party will make independent, commercial decisions on how to invest, within parameters set by government when developing the relevant funds, as one or more could be used in combination.

As well as investing in the deployment of physical charge points, or the companies that will install them, the CIIF will also have a wider remit across the EV charging infrastructure landscape.

On the back of the successful passage of the Automotive and Electric Vehicles Bill through parliament, which includes a mandate to only allow smart-enabled charge points to be sold or installed in the UK, the CIIF will also be used to develop the software and platforms required to run charging infrastructure and to make them smart, communicative and interoperable.

The fund will also be used to pay for grid connections to the national and local electricity distribution networks, as well as any related grid reinforcement, suggesting the roughly 70 meetings conducted in recent months have prompted a change of tact from government.

Initially the CIIF was expected only to fund the ownership and operation of charge points however pressure has grown from charging network operators such as Chargemaster, who previously stated publicaly that the government fund would “skew the market”, and that funds should be directed towards meeting the cost of expensive grid connections.

Finally, the funds can also be applied to battery storage solutions that may be related to the provision and operation of charge points. This would suit the likes of Pivot Power, which has already set about deploying 45 50MW batteries across the country to support the roll out of rapid EV chargers, with the first approved in Southampton.

The CIIF will also seek to address the inherent investment risk surrounding the deployment of EV charging, with the IPA suggesting that opportunities for commercial investment will require high utilisation or, more likely considering current levels of EV market penetration, some form of underwritten revenues.

This was pointed to by Natalia Peralta Silverstone, senior consultant at Pod Point, when she spoke to Current± recently about deploying public charging infrastructure: “It is difficult in the short term because you have a utilisation risk with anything we install over the next five years.

“So the companies that build that infrastructure out will probably be infrastructure providers just doing that.”

The IPA is suggesting that ‘petrol station’ or hub-type sites in busy urban and suburban locations could be likely targets for investment. More interestingly, it has also suggested the use of minimum usage guarantees from vehicle fleets to fund charging depots, or contractual arrangements for projects with underwritten ancillary revenue streams.

To manage these various options, the Treasury is seeking proposals from potential fund managers with “a proven track record” in the EV charging or a related sector to demonstrate their suitability to the role.

The department is will close its search on 21 September 2018, with a shortlist of around three potential managers to be selected in October. The target is to select a manager by December 2018 and for the fund(s) to be closed and in a position to begin investing in early 2019.

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