New buys give HgCapital €1bn in renewable assets

HgCapital Renewable Power Partners has announced the acquisition of two Spanish solar projects and an onshore wind project in the UK. The new deals take the fund’s capital value past the €1bn mark and make 2009 its most active year since closing in late 2006. Its portfolio now comprises 19 projects with a 325-megawatt capacity.

UK-based private equity firm HgCapital’s renewable fund has acquired three new assets, taking its portfolio’s gross capital value past the €1 billion mark.

The London-based fund’s new investments are worth €300 million in debt and equity. One of them comprises a joint venture with renewable firm Peel Energy, making the two firms equal partners in owning and operating England’s largest onshore wind farm, Scout Moor. The 65-megawatt facility operates near Manchester and produces electricity for 40,000 homes.

The other two purchases were made together with Spanish firm Plenium Partners and include two Spanish solar projects. These comprise a 12-megawatt project in Castilla La Mancha, in central Spain, developed by Naturener’; and an eight megawatt project in Murcia, in the south-east of the country, developed by GA Solar. The latter is expected to be operational in April 2010. All acquisitions benefit from long-term, project finance debt, HgCapital said in a statement.

HgCapital said 2009 was the most active year for its renewable fund since it closed at €300 million in late 2006. The fund’s transactions last year reached €600 million in debt and equity. “Before the downturn, we held our fire instead of rushing in at unsustainable valuations or taking on second-tier assets,” Tom Murley, the head of HgCapital’s renewable team, said in a statement.

The private equity outfit’s renewable fund owns 19 projects focusing on onshore wind in the UK, Spanish solar assets and Swedish wind. Additionally, HgCapital owns two French wind farms, one Irish wind farm and four German biomass plants. The portfolio has a 325-megawatt capacity and a large development pipeline, HgCapital said.

To learn more about how renewable energy is catching investor interest, read our in-depth feature on renewable energy in the February issue of Infrastructure Investor magazine.