First shoots of economic recovery emerge from green business firms

29 Sep 2009

An early stage investor in green-tech businesses, which today has just raised a new €3m investment fund, has forecast a positive outlook for Ireland’s green-business sector, despite the gloomy outlook for other sectors of the economy.

The positive outlook by BVP Investments, which has invested in firms like Biomass and WaveBob, is based on its analysis of projected growth in the sector throughout 2010.

The current performance of Ireland’s green sector is generating optimism among investors that significant growth levels can be achieved in the next five years.

In 2007, BVP Investments launched a Business Expansion Scheme fund called the Green BES Fund.

It has already invested €2.5 million in five Irish businesses over the past two years and, with three more high-potential start-ups in the pipeline, it is set to invest an additional €3 million over the next two years.

“From the outset, we wanted to differentiate ourselves from the existing BES funds and so we chose to focus exclusively on the green sector and early stage ventures,” said Elliott Griffin, managing director of the fund.

“Over the past two years, we have invested in a diverse range of green businesses and we are already seeing the many positive results which have flowed from our investments. Despite the backdrop of falling stock markets, additional international investors have also been secured and these investors are attaching higher valuations to the companies we have invested in because of their high-growth potential.

“There’s no doubt that with the right investment behind it, the green sector has the potential to lead Ireland’s economic recovery over the coming years,” Griffin added.

BVP Investments has today launched its third fund, with a target fund of €3 million. Taxpayers should apply for places in the fund as soon as possible in order to reduce their preliminary tax bill payable at 31 October, 2009.

They are also inviting accountants to offer the tax-saving investment product to their income-tax clients.

Among the companies that BVPO has already invested in is Wavebob, a company developing wave energy conversion technology has progressed their technology significantly with a partnership with the leading Swedish energy company Vattenfall AB.

They recently announced a top-tier partnership with US defence manufacturer Lockheed Martin. They have recently received funding from the Irish Technology Leaders Group (ITLG) founder John Hartnett and have confirmed pilot customers in Chevron Energy in the US and Vattenfall, also.

The company has also been successful in securing investment from Enterprise Ireland, Sustainable Energy Ireland and is recipient of one of the largest fundings under the European Framework 7 programme. The company has sufficient funding to deliver its first full-scale device within two years, which is well ahead of plan.

Biomass Heating Solutions, another of BVP’s core investments, established in 2006, has made significant strides forward in the last 12 months since receiving investment from the Green BES Fund. Its founder, Jack O’Connor, has been assisted by research from the biomass experts in the University of Limerick, and the company has now installed three pilot sites in Ireland and has recently confirmed plans and major investment for a further five sites in the UK.

This company’s technology, which combusts farm waste into heat, has also significant potential to generate electricity. Initiatives under way in the UK are particularly attractive – allowing farmers and food producers to earn revenues from the practice of spilling unused electricity back to the national grid.

EFT Control Systems, established in 1998, was at the time of the Green BES Fund investment a small software company for 10 years. Although it provided its software under white label to ESB Independent Energy, the company had little expertise or resource in sales and marketing and had not sold outside of Ireland.

Since the investment, the company has expanded its management team and sales team, has developed UK distributors and has received investment from a significant US investor. The company now has a pilot installation in the New York Times building and has recently received a significant order from the US Department of Energy for its energy monitoring software. Early feedback indicates that this little company has technology far ahead of some of its competitor giants such as Honeywell, Schneider and General Electric.

Skypaq, a software developer based in Mullingar, Co Westmeath, recently announced a 10-year contract with Finnair. Prior to its investment, the company had developed its innovative software with an Irish airline which subsequently went out of business. Breaking into the international airline sector was never going to be easy and the company needed the support of industry insiders and the larger technology service companies.

The company has since secured investment from the McEvaddy brothers and the Murtagh family investment vehicle. In addition to assisting Finnair, the Finnish flag carrier, in becoming the first commercial airline to implement a paperless cockpit, the company is in the process of installing its software in its first US airline customer and will be soon announcing further new clients.

A final example is Celtic Bioenergy, formerly known as Celtic Composting, a company established in 2001 by the Ernst and Young Entrepreneur of the Year nominee Dr Andrew Walsh. Under the leadership of Walsh, Celtic has become the leader in the biological treatment of municipal waste and has been project developer for a number of large-scale plant builds in both Ireland and the UK.

Since receiving investment, the company has been shortlisted for major waste projects with some of the largest industry players, such as Greenstar, Viridor and Veolia. The company is expecting to announce its involvement in a significant joint venture in the UK which will firmly establish it as an independent bioenergy player in its own right.

By John Kennedy

Photo: The performance of Ireland’s green sector is generating optimism among investors that significant growth levels can be achieved within half a decade.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years