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First fundraising brings in big bank -- Mainstream investment

Barclays Capital, the investment banking division of Barclays Bank, is investing EUR 20 million in Mainstream Renewable Power in return for a 14.6% stake in the Dublin-based company. The investment comes as part of a successful EUR 40 million fundraising effort by Mainstream, which was founded in February this year by Eddie O'Connor, the former founder and boss of wind power developer and retailer Airtricity, which he sold earlier this year to UK utility Scottish & Southern Energy.

The other half of the EUR 40 million has come from Mainstream's board, management and staff as well as close associates. Added to the initial seed capital of EUR 32 million, it brings the total equity raised so far to EUR 72 million. Barclays Capital has committed to invest a further substantial amount in another major fundraiser planned for later this year. Mark Brown, head of Barclays Capital Commodities' principal investment team, has been appointed to the Mainstream board.

The money raised will pay for the company's rapid expansion plans across Europe, North and South America and Australia. In Chile, Mainstream has signed a preliminary agreement with Andes Energy to build an initial 240 MW of projects, while in the US it claims to be at advanced stages in the negotiation of large projects.

It has also invested EUR 1 million in a little known Dutch offshore wind turbine designer, 2-B, which in May received a EUR 1.5 million investment from Truffle Capital, an independent private equity firm based in Paris (page 30). Mainstream stresses that the investment in 2B is not a core focus for the company.

Mainstream's chairman, Fintan Drury, says the investment by Barclays Capital represents a strong endorsement of the company's ambitions over the coming years. "Our plan is to go to investors with a series of commercial opportunities later this year and to raise enough equity to develop them. There are exciting times ahead for Mainstream and we are very pleased to have the support of Barclays Capital as well as our other investors."

Brown describes O'Connor and his team as recognised world leaders in the renewables industry. "They have demonstrated their ability to identify the best opportunities globally and put the most effective people in place to deliver them."

Mainstream's next fundraising will be led by Dolmen Corporate Finance in Dublin. The company says it expects strong interest from private investors, institutions and renewable energy funds.

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