Ireland's Green IFSC targets US$200bn worth of asset management

Ireland’s aim to be a global hub for ‘green finance’ could see the emerging Green IFSC eventually manage US$200bn worth of green funds, it emerged this week.

The Green IFSC, a public/private output of the IFSC Clearing House Group at the Department of the Taoiseach, has revealed at its inaugural tax briefing that it aims to increase ‘green’ assets managed or serviced in Ireland from US$10bn to US$200bn in the coming years.

An audience of more than 100 leaders from the international financial services, green enterprise and public sectors were advised this week that the US$10bn currently managed, domiciled or serviced from Ireland already represented close to 4pc of the US$263bn global market in 2011.

Top green funds already managed in Ireland

Managers operating from Ireland are responsible for some of the world’s leading ‘green’ funds, such Kleinwort Benson’s water fund. And, BlackRock, the international fund management firm recently announced its first fund focused on investments in renewable assets globally to be managed out of Ireland.

Enda Faughnan, partner, PwC/chairman Green IFSC Tax Working Group, explained that Green IFSC aimed to achieve this growth by creating the optimum business environment for green finance to flourish and that an important part of that was ensuring the most appropriate tax environment.

“The Green IFSC Tax Working Group has helped facilitate six tax changes to support and accelerate the growth of ‘green finance’ in Ireland. We are here today to update you on what those changes mean to real businesses in the sector.”

Funding the low-carbon economy

Faughnan said he would also like to acknowledge the Department of Finance and Department of an Taoiseach for their co-operation and collaboration in bringing about these changes and unfailing support.

Gary Tobin, Budget, Taxation & Economic Division, Department of Finance, provided an update on the recent green tax changes.
‘Green finance’ refers to capital markets, investment banking activities and related advisory services, which support the development, finance and promotion of a low-carbon economy.

It includes funding of renewable energy generation, energy efficiency measures, trading and management of carbon and clean-tech/sustainable funds.

“Ireland is well placed to reach these targets and grow assets under management. Already assets under management has reached €2.3bn – up more than 100pc in the past year and 200pc in four, according to figures from Lipper and PwC.”

Proponents of the Green IFSC believe Ireland is in a unique position to be a world leader in green finance, possessing all the ingredients needed to grow upon an already impressive cluster – a world-leading international financial services centre, a grouping of green enterprise companies active across the globe, some of the best natural resources in the world, the talent and expertise, and a supportive Government helping ensure the optimum business environment.

John McKiernan, a partner at Novusmodus, said: “Three years ago, ESB took the decision to fund ESB Novusmodus with €200m and created one of Europe’s leading clean-tech and renewable investment funds.

“Today it is based in Dublin and Novusmodus also has offices in London and Munich. Building on the existing cluster of green enterprise and funding initiatives, Ireland is quickly developing the credentials as a leader in the new clean-tech industry. Green IFSC activity can only accelerate that growth.”

Enda Keane, co-founder and CEO of TreeMetrics, added: “The Green IFSC facilitated changes to the Irish securitisation regime, and specifically the recognition of forest carbon credits in tax legislation means that we now have an additional added value.”

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