Time is right for investment funds -- Six projects snapped up

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German wind developer Eno Energy has sold six wind farms with a combined capacity of 26.7 MW to independent fund management company DIF for around EUR 50 million. The wind farms, all in Germany, are a mix of Vestas and Enercon turbines installed between 2007 and January this year. For DIF and its Renewable Energy division, first launched in 2007, the Eno deal takes its wind portfolio to 217 MW in Germany and France. Having started with EUR 134 million to spend, it has sufficient capital left in that pot to buy 50-60 MW of additional wind projects, it says.

Eno has raised a further EUR 200 million from investors which will cover a second program of renewables and infrastructure project investment, dubbed the DIF Infrastructure II Fund. DIF hopes to raise a further EUR 300 million for this fund by the end of 2009. DIF invests in wind or solar projects that are under construction or in operation. All projects must have long-term agreements for power sales, such as provided by the German, French and Spanish renewables market support frameworks, it says.

Ripe for investment

DIF's Christopher Mansfield says the market is ripe for investment firms like DIF, even though project prices have not collapsed as a result of the global credit crisis. "Transaction processes have become more reasonable for the investor, despite the fact that many sellers in the market today are not willing sellers," he says. Many of today's sellers, he notes, were not in the market 18 months ago. "This trend is being driven by industrial investors having to raise capital and refocus on core business areas, wind developers that are unable to raise balance sheet finance to fund projects, and funds that are being liquidated to return capital to investors or pay down corporate debt," he adds.

For Eno, the DIF deal means it has already met its 2009 profit forecast, according to the company. "This is of particular significance in the current difficult economic environment. Eno offered the portfolio for sale in mid-2008, with DIF's bid among several registered from investors active worldwide. Eno plans to put another portfolio up for sale by the end of this year. It will include projects it owns overseas and some that use its own 2 MW turbines, it says.

The wind turbine being employed by Eno is a standard three-blade, pitch-controlled model, designed in close cooperation with engineering company RSB Consult, now part of India's Kenersys. Manufacturing output from the Kenersys German factory is expected to reach 40-50 turbines this year, rising to 70-80 units next year. With sites for potential onshore projects becoming scarce in Germany, Eno is unsure how much more capacity it is likely to install in its home market, so its turbines will mostly be used overseas. It has about 60 MW under development in France, for implementation over the next two to three years, while negotiations are underway for turbine sales to projects in Poland and Latvia.

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