CBA-owned fund manager behind €900m wind power investment

The rapid growth of investor interest in renewables was highlighted again this week with the news that Commonwealth Bank of Australia-owned First State Investments was behind a €900 million deal to buy Portuguese renewable energy assets amounting to more than 800MW of operating wind farms.

Enel Green Power announced on Monday it had signed an agreement with Portuguese company First State Wind Energy Investments, for the sale of its wholly-owned subsidiary Finerge Gestão de Projectos Energéticos.

First State Wind Energy Investments is 100 per cent-owned by funds managed by First State Investments (FSI), a global asset management business that is, in turn, owned by CBA.

FSI said the total consideration for the sale was about €900 million, including the repayment of shareholder loan to Finerge. EGP says it will exit the Portuguese renewables market upon completion of the deal.

Finerge works in the development, construction and operation of wind farms in Portugal, and currently holds indirectly through subsidiaries a portfolio of operating plants with a total consolidated installed capacity of 126MW, as well as minority stakes for 292MW.

Finerge also holds a stake of 35.96 per cent in ENEOP – Eólicas de Portugal – a company that owns a portfolio of operating wind farms with a total installed capacity of 1.3GW. If a separation of assets by ENEOP is successful, Finerge could own wind farms in Portugal with a total installed capacity of 863MW.

Remarking on the sale, Enel Green Power CEO Francesco Venturini said it was part of the company’s active portfolio management strategy, a key pillar of the Group’s five year strategic plan.

“There is strong demand for renewable assets and by selling an operational platform in a mature market, we register an early success in delivering against the commitments we made to the market earlier this year.”

It’s a sentiment that was expressed by various institutional investment analysts at a recent conference hosted by Fortune magazine in Texas over the weekend.

“We have installed more renewable energy around the world in the last year than conventional resources,” said Kyung Ah-Park, managing director of environmental markets at Goldman Sachs.

“The underlying thesis behind clean energy has become very strong and is only becoming stronger, and I say that first and foremost because of the economics.”

Michael Eckhart, global head of environmental finance at Citigroup, said renewable energy sources like solar power were proving commercially viable and low risk, drawing interest from investors traditionally interested in conventional generators, reports the Houston Chronicle.

“This is the decade of innovation in the finance of clean energy, and I would say we are 40 years into a 100-year transition to clean energy,” Eckhart said.