£50m new Evergreen fund moves into view
A new £50m urban development fund, Evergreen 2, will be established next year if plans discussed by the Greater Manchester Combined Authority today are approved.
Greater Manchester was awarded £195m as part of the 2014-20 round of the European Regional Development Fund programme. GMCA proposes to use £97m of its allocation in the following areas:
- £50m for infrastructure in form of second North West Evergreen Fund, to provide debt or equity for commercial property and regeneration projects
- £32m for business as successor to North West Fund, to provide debt and equity to SMEs
- £15m Low Carbon Fund, which GMCA said would be flexible to support a broad range of projects
The financial instruments would be used for making recyclable investment, such as loans or equity, rather than providing grants.
A report to the council from Eamonn Boylan, chief executive of Stockport Council, said: "The Evergreen proposal seeks to build on the track record and success of the first Evergreen fund, which is effectively committed."
"Without additional funding, Evergreen is effectively closed until Evergreen 2 funding becomes available next year… there is a need to take action now in order to preserve some investment capacity in the intervening period."
Evergreen's investments so far include a £6m loan to the Soapworks 400,000 sq ft office development in Salford by Carlyle, Abstract Securities and Nikal Developments; £9.5m alongside Lloyds Banking Group into Bruntwood's 100,000 sq ft Citylabs centre in Manchester's Oxford Road; £10m for the 4m sq ft Logistics North project by Harworth Estates in Bolton; £4.8m for Muse Development's City Place scheme in Chester, and £10m for Allied London's Cotton Building in Spinningfields, Manchester.
Should the proposals be approved, funding from Evergreen 2 will become available in 2015.
GMCA confirmed in papers to go to the executive committee meeting today that the current Evergreen fund was oversubscribed by £39m, with £49m of projects currently on site or in due diligence. Alongside the proposal for Evergreen 2, GMCA will also consider plans to boost the investment capacity of the current fund to ensure that money is still available until 2015.
The initial £30m Evergreen fund came from public money allocated from the North West's share of the ERDF under JESSICA – the Joint European Support for Sustainable Investment in City Areas initiative. Since launch it has received a further £19m from other pools of capital including additional ERDF investments.
In order to add to the funds currently available, GMCA is proposing that the local authority for the borough where a project is located lends up to £5m, which will be matched by a corresponding investment from the Growing Places fund. The loan would be repaid through future Evergreen receipts.
CBRE is currently the fund manager for Evergreen. With the impending launch of Evergreen 2, a reprocurement exercise for the fund manager will be undertaken over the summer.
The North West Evergreen Fund is made up of 16 local authority limited partners spanning Greater Manchester, Lancashire County Council and Cheshire County Council.
