IT was the kind of challenge that might have fazed even the most experienced of financiers: raise £300m in the aftermath of the biggest financial crisis since the Great Depression to fund the roll-out of a renewable energy technology which was unproven in the UK.
That was the task handed to Chris Rigg in 2009, just four months after becoming corporate finance director at Eaga, the Newcastle-based services firm since swallowed up by Carillion.
Project Bright, as it was known, was Eaga chief executive Drew Johnson’s bid to exploit the opportunities presented by the pending feed-in tariff legislation due to come into effect in the following year.
It was, Rigg acknowledges, a great example of Eaga being “ahead of the game”. But the pressure was on.
“The chief executive had publicly stated his ambition to do 40,000 solar installations a year – so we needed to raise around £300m to allow that programme to start and fulfil that ambition,” he recalls.
Rigg admits that there were times during the 18-month fundraising effort that he feared the task was unachievable. But he later acknowledged that he is driven on by a fighting spirit developed as he fought back from a pivotal moment in his personal life.
A week before he was due to sit his A-levels, 17-year-old Rigg was involved in a car crash that left him with a broken back and neck. He spent three weeks in intensive care, three months in hospital and a further 12 months as a hospital outpatient in a plaster cast from head to waist. Devastatingly, the keen footballer and tennis player was told that by the age of 36 his condition would have deteriorated to such an extent he wouldn’t be able to take part in any kind of sport.
Two years ago, motivated by a determination to prove the medics wrong, he ran the Paris Marathon. “A big part of me wanted to do something that was quite extreme just to prove that I could,” he says. “I guess it engendered a bit of a fighting spirit in me.”
Indirectly, the crash also led to Rigg heading to the North East. Forced to delay his A-levels by 12 months, he reassessed his university options and put Newcastle at the top of the list. He landed a place reading Economics, fell in love with a local girl and now admits he can’t ever imagine leaving (apart from frequent trips to see his beloved Liverpool FC).
It was the Eaga fundraising which would take Rigg away from the North East for the longest period, when he spent seven months in London trying to convince investors that it was a project worth supporting.
Whilst these days solar panels are a familiar sight on house roofs across the UK, three years ago they were far less common. Would the sun really shine enough to deliver the kind of returns investors craved?
“The technology, whilst proven in Europe, was unproven in the UK; there was scepticism,” Rigg recalls. “So you had to prove the technology worked and you had to educate people about a technology and a whole world that a lot of funders didn’t understand.
“We had questions like, ‘If the sun doesn’t shine, do you still generate electricity?’ Then we had to educate them about the benefits of putting this technology into social housing and putting it on people’s roofs, because it was predominantly for residential properties. And you had to prove that once installed that these things would generate the level of electricity and therefore the cash flow that you said they would. So it was really very challenging.
“It was only really when we got to the stage where we were able to prove through demonstration of having actually installed these things that you could see it coming to life.”
Rigg, who was later asked to lead the team of four charged with the fundraising, is justifiably proud of what they eventually achieved in March 2011. “It is unique to this country,” he explains, because of the multiple number of customers that were involved – including energy firms, housing associations and even individual tenants.
“The IP became a precursor for what became Green Deal in terms of developing a long-term financing solution for renewable type energy efficiency measures in multiple homes or buildings,” he says. “It was really very pioneering at that time. So the funding was extremely complicated.
“Essentially for the banks there was not a lot of security. They just had to believe in the market. It is difficult to get across how difficult it was. There were numerous times that we thought it wouldn’t go through; that it was too much and too hard. What it did was signpost there was a way of providing private funding for public policy in a multi-customer environment.”
Rigg – who began his career with PricewaterhouseCoopers in Newcastle before moving to the mergers and acquisitions team at Deloitte – looks back fondly on his time at Eaga, which became the subject of a takeover bid from Carillion in the very month that the Project Bright fundraising was finally achieved.
Recalling the organisation he joined in 2009, he says: “It was a rapidly growing business. It was very entrepreneurial with some fantastic commercial ideas. It was very well positioned at that point in time probably ahead of the curve in its understanding of the importance of energy efficiency and the way the market would go.
“It was blessed with some very good commercial originators. It had grown substantially on back of the government Warm Front contract but fundamentally it had some great ideas around where the market would go in the future. I enjoyed the real entrepreneurial spirit in that business.”
Last year turned out to be a turbulent one for Eaga when the coalition government halved payments through the feed-in tariff, sparking a legal challenge that the government lost. The move led to a near-90% drop in installations nationally and a wave of job losses at the Newcastle-based firm.
Rigg, who left the company shortly after the fundraising was complete, says there is no doubt that the matter could have been handled better by the government, but acknowledges that the generous terms of the deal needed amending.
“We did a lot of work (in 2009) around whether the tariff was likely to change,” he says. “Since then the cost of solar panels has halved. Not only did you get very savvy customers but you also got a real reduction in the cost of the panels.
“There’s a very strong argument that what happened was not ideal in terms of generating future confidence and investment. But it was expected that the cost of technology and installation would fall.”
He remains convinced, too, that there is a future for businesses in the renewable energy sector, insisting the “green agenda is not going away”.
“I think there’s still a future for solar. I think the cost of panels and installation is undoubtedly coming down. I do believe there are businesses out there that will make it work. It’s been made harder for businesses but ultimately as part of a balanced approach to energy supply it has a place in the market.”
And that is what made Eaga a target for Carillion, the West Midlands-based construction giant. “Eaga was an attractive business. If the lights go out in this country we have a problem. Businesses that are at the forefront of entrepreneurial spirit in this market were always going to be attractive.”
After an eventful spell in industry, these days Rigg is back on the other side of the fence having joined Barclays as corporate director in late 2011.
He admits there was a “degree of risk” in moving into banking at a time when the industry seems to be lurching from crisis to crisis but insists “it’s been a very positive experience and there’s more of a growth culture than I expected”.
He hopes his time at Eaga will enable him to provide a new dimension to the team at the bank’s offices in Newcastle’s Grey Street. He also enjoys an insight into the reality of life at the coal-face of the business world because his wife is involved in a long-established family business selling equipment for the music industry. And he is gaining firsthand experience of the challenges facing the charity sector having recently joined the NSPCC business board for the North East. The newly-appointed board will help oversee the children’s charity’s strategy for the region and assist in fundraising activities as well as raising its profile and engaging support from businesses.
Rigg acknowledges that confidence remains delicate in the North East economy. “Businesses are still appraising whether they should invest in a piece of capital and whether now is the right time to move into new markets or make that acquisition,” he says.
But as the son of an engineer, he believes the region has a bright future, especially in the green energy sector which he knows so well.
“The North East has excellent academic capabilities, notable research centres in this area,” he says. “The region has demonstrated right way back to the Industrial Revolution that it has evolved through its energy cycle, and we have the physical attributes and ability to get best out of the land.
“It’s a real opportunity but it will take time to evolve.”
What car do you drive?
BMW 335i coupe.
What’s your favourite restaurant?
Last days of Raj, Low Fell, Gatshead.
Who or what makes you laugh?
Peter Kay and my kids.
What’s your favourite book?
Not a massive book fan really – autobiographies I do like – Alan Sugar’s is one of the best I have read.
What was the last album you bought?
Noel Gallagher’s High Flying Birds.
What’s your ideal job, other than the one you’ve got?
Professional footballer, sadly that has passed me by on several levels.
If you had a talking parrot, what’s the first thing you would teach it to say?
What’s your greatest fear?
What’s the best piece of business advice you have ever received?
Look after your people and customers and the rest will follow.
And the worst?
“Don’t worry too much about issues, they tend to go away” – thankfully I ignored that.
What’s your poison?
What newspapers do you read, other than The Journal?
How much was your first pay packet and what was it for?
Just over a thousand pounds for printing some T-shirts with logos and selling them to builders. Great earner.
How do you keep fit?
Circuit training twice a week and running once a week.
What’s your most irritating habit?
I bite my nails, have failed on several occasions to stop.
What’s your biggest extravagance?
In the past it has been following Liverpool around – I spent a fortune getting to Istanbul and Athens to watch them in European finals.
Which historical or fictional character do you most identify with or admire?
I admire the success and courage of Sir Bobby Robson enormously, a truly great man.
Which four famous people would you most like to dine with?
Bill Shankly, Richard Branson, Peter Kay, Kylie.
How would you like to be remembered?
Raising great kids, having a successful marriage and career and an above average left foot!