Allianz banks on Europe's onshore

EUROPE: Global investor Allianz Capital Partners has confirmed its commitment to renewable energy, and onshore wind in particular, with nearly EUR1 billion-worth of wind farms and EUR150 million of solar parks in Germany, France and Italy now in its portfolio.

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At more than 600MW, Allianz boasts one of the largest financial investors' renewable energy portfolios in the world, according to CEO David Jones. He says wind energy is a good investment because it generates attractive returns irrespective of capital market fluctuations. Wind projects' 20-year operating life makes the sector a good fit for the Munich-based firm's long-term strategy.

"We now have 27 European wind farms in our portfolio", he says, "14 in Germany, 12 in France and one in Italy. We operate mainly on behalf of insurance company investors and are focused exclusively on the Euro-zone". Allianz has confirmed it is not currently looking at the UK or other non-Euro EU member states.

"We are attracted to holding wind energy assets for their whole 20-25 year operating life, not intending to liquidate them after five to ten years like most other funds," says Jones. "Our strategy is not to get involved in development but buy into projects when they are either operational or fully permitted and ready to build."

Since entering the renewables sector in 2005, Allianz has worked with developers such as WKN, Denker & Wulf and Nordex France. Now the company says it is looking into long-term service contracts with turbine manufacturers such as Vestas, Enercon, Repower, Nordex and Siemens.

Jones says he is comfortable with the much-maligned French market for wind, which he says "has got into its stride" in the past couple of years. "We are working within the newly designated French development zones for wind power and have two large plants now at 48MW and 52MW," he adds.

While some analysts believe Germany has fully exhausted its capability for wind power growth, Jones sees "a steady flow of onshore projects" still coming through, although he accepts there is a limit after which "the push will be for offshore".

Allianz, however, believes that offshore wind still presents "significant incremental risks". If and when it gets involved, "we will do it as a minority investor with a utility".

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