London-based private equity and renewable energy fund manager HgCapital has raised around €542 million for its second renewable energy fund (RPP2), according to market sources.
The firm spent around 20 months on the fundraising trail and beat its €500 million target. The firm’s first renewable energy fund, RPP1, closed on €303 million in 2006. UBS' private funds team worked as placement agent on the fundraising.
PEI sister publication Infrastructure Investor previously reported that RPP2 had reached €390 million in July this year. At that point, HgCapital Trust announced that it had committed €40 million to the fund compared with a €21.6 million commitment to the predecessor fund. HgCapital Trust is a London Stock Exchange-listed investment trust which takes minority stakes in HgCapital’s deals.
HgCapital Trust says its target return for its investments in HgCapital’s renewable energy funds is between 17 percent and 20 percent per annum.
RPP2 will replicate the strategy of RPP1, which has been building utility-scale power platforms across Europe, including six operating onshore wind projects in the UK totalling 113 megawatts and seven operating solar projects in Spain totalling 61 megawatts.
By July, RPP2 had invested in two platforms: two Swedish onshore wind projects with 85 megawatts under construction; and 14 Spanish mini-hydro projects of 55 megawatts, with a further 16 megawatts to be built in the next 12 months.
Last month, HgCapital was among a group of 14 international investors that served the Spanish government with a demand for international arbitration over its December 2010 decision to retroactively change the tariff regime regulating investments in the country’s solar photovoltaic sector.
In its latest deal earlier this week, HgCapital closed a £28 million (€33 million; $44 million) project financing facility on the 24-megawatt Hall Farm wind project near Beverley in the East Riding of Yorkshire in northern England.
According to a statement from RidgeWind, which developed the project, Hall Farm is “majority owned” by HgCapital. Renewable energy company Statkraft will purchase the power generated by the project, RidgeWind said.
RidgeWind went on to state that Royal Bank of Scotland provided £28 million in financing. The wind farm is set to begin operation in November 2012. RidgeWind chief operating officer Dan Glasgow remarked in a statement that the deal was a “milestone” considering the current “financial climate”.
RidgeWind describes itself as the “sixth largest” independent wind farm developer in the UK.
*This story included additional reporting from Chris Glynn