Development Bank of Wales invested nearly £62m in first half of its current financial year

The Development Bank of Wales invested nearly £62m to support the growth of indigenous SMEs in the first half of its current financial year. The bank, which is wholly-owned by the Welsh Government, said its debt and equity investment activities from April to September of £61.8m, leveraged in co-investment of just over £42m.

This gave a total economic impact of around £104m. The bank provided financial backing to 221 firms across Wales, which supported 3.245 jobs. The average loan was £192,000 with an average interest rate of 8.3%. Around 12% of its direct investment was in the form of equity investment (£7.8m).

The bank said it couldn’t give any financial details on returns from interest and capital repayments and exits from equity investments, until its full year accounts are published.

The development bank, which no longer receives funding from the Welsh Government (although it manages some funds on its behalf), has £2bn of funds under management and a portfolio of 3,378 customers.

One of the businesses to benefit from its support in the first half of its financial year was Lineat, a sustainable technology business specialising in the recycling of carbon fibre. The company has moved to Chepstow following a £1.4m equity raise led by the development bank and Green Angel Ventures.

Following a £60,000 loan from its green business loan scheme, Gwynedd-based fruit and veg wholesaler Bwydydd Oren Foods its reducing carbon output and energy costs with the installation of a 60 megawatt solar panel array and electric vehicle charging points.

The new chair of the development bank, Sally Bridgeland said: “Having spent 25 years at the forefront of the UK investment market, I am passionate about the use of financial instruments to deliver long-term economic growth with clear social value.

“Boosting growth and unlocking investment is a priority for governments in both Wales and Westminster. With the creation of the National Wealth Fund and the first phase of the UK Government’s pension investment review now under way, we’ve got a real opportunity here in Wales to maximise the benefit of long-term capital for Wales as a tool for improving social, cultural, environmental and economic well-being. This is what will create long-lasting, positive change.

“These half-year results demonstrate the difference that the Development Bank makes to the Welsh economy, supporting jobs and supporting thriving communities throughout Wales.”

Chief executive of the development bank, Giles Thorley said “As an impact investor, we’re providing accessible funding to support the long-term sustainability of the businesses that we fund while advancing the ambitions for a green future in Wales.

“Indeed, as we reflect on the first half of this financial year, there is a marked increase in demand for funding and we are particularly pleased to see a rise in co-investment compared to this time last year. We’re continuously reviewing and developing our funds together with our working processes to ensure that we’re meeting the needs of Welsh businesses and improving our customer experience. We’re committed to making it as quick and easy as possible for businesses to access the funding that they need to start-up, adopt new technologies and create employment opportunities.