Hg moves into renewable energy

HgCapital has acquired a windfarm in Wales in what it expects to be a series of renewable energy deals.

European mid-market private equity investor HgCapital has announced the acquisition of Welsh windfarm Tir Mostyn from Windjen Power Ltd. The deal, valued at £21.6 million (€31 million; $42 million), includes future construction costs.
Tir Mostyn windfarm is situated in Denbighshire, North Wales. Once completed, it will consist of 25 turbines with a combined capacity of 21.25MW. In a press release, HgCapital says that this is enough to power 15,500 homes, and could potentially save approximately 47,000 tonnes a year in greenhouse gas emissions.

The turbines will be manufactured and operated by Gamesa Eólica of Spain, and the completed farm will become operational in September 2005.
The firm has been investigating investments in renewable power generation for over two years, according to Tom Murley, a director at Hg. In February, it established a renewable energy team that aims to invest in the sector in order to generate long-term income through wind, hydro, landfill gas and waste-to-energy projects in Western Europe.
Debt facilities for the Tir Mostyn deal, which the firm describes as the first in a series of investments in the sector, were arranged and underwritten by the Bank of Scotland.
HgCapital was advised by Vinson & Elkins, Deloitte & Touche and Wind Prospect Ltd. Bank of Scotland was advised by Norton Rose and Garrad Hassan & Partners.
HgCapital has offices in the UK and Germany and manages funds of €1.3 billion. It focuses on companies with enterprise values of up to €400 million in the consumer, healthcare, industrials, leisure, media and technology sectors.