HgCapital on course for renewable fund goal

The London-based European private equity firm has so far raised €390m for its second renewable energy fund, on its way to a target of €500m.

HgCapital, the London-headquartered private equity firm that invests across Western Europe, has so far raised €390 million for its second renewable energy fund, RPP2. The firm is aiming to raise €500 million for the fund, which was launched last year.

The information was disclosed by HgCapital Trust, the London Stock Exchange-listed investment trust which takes minority stakes in HgCapital’s deals, in an update to shareholders. The trust said its commitment to the fund is €40 million, almost double the €21.6 million it committed to the predecessor fund, RPP1, which closed on €303 million in 2006.

In June last year, it was reported that RPP2 had filed an application with the European Investment Bank for up to €50 million of funding.

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.

So far, RPP2 has 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.

HgCapital Trust says its target return for its investments in HgCapital’s renewable energy funds is between 17 percent and 20 percent per annum.