Fund banks onresilient renewables -- Developer gets strong partner

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French finance provider AXA Private Equity and the renewables arm of Italian industrial firm Tozzi Group are forming a joint venture company, TRE & Partners, to take forward Tozzi's 400 MW portfolio of renewable energy projects currently under development or construction. Tozzi's existing wind and hydro assets will also come under the ownership of the new company.

Tozzi is the majority shareholder, with a 55% stake in TRE & Partners. AXA's 45% stake is held by its Infrastructure Partners Fund, a fund allocated EUR 1.1 billion to invest over a 20-year period.

The deal comes soon after the AXA fund bought a 30% share in three wind farms owned by Tozzi in the southern Italian region of Apulia -- a 41.4 MW project in Calvello, 42 MW in Serracapriola and a 39.1 MW plant in Candela. Calvello has been operating since 2007, while the other two were connected to the grid in December. These were developed by Daunia Wind, a 50-50 joint venture comprising Tozzi and another Italian company called Margherita.

The Tozzi acquisitions represent the AXA fund's first investments in renewables. "I think that TRE & Partners will be a growing platform that will enable us to invest and develop more with our partner," says Mathias Burghardt, who heads AXA Private Equity's infrastructure group. The fund could also look for renewable investment opportunities elsewhere, he adds. Currently, around 40% of the EUR 1.1 billion fund has been allocated.

"AXA Infrastructure Fund's investors are basically life insurance companies and pension funds in Europe and North America," says Burghardt. "The idea is to invest in the long term to have assets that maybe have a lower return than a traditional private equity investment, but which are also more resilient and have less exposure to economic cycles."

Tozzi has technical expertise and is well known in Italy's renewable industry, he says, while AXA is a traditional investor with an international footprint that can help secure financing. "Today, this is critical," he says.

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