News & Media
Keep up with Glennmont Partners’ latest transactions’, new hires and success stories
Glennmont acquires stake in the Gode Wind 1 Offshore Wind Farm in Germany
Date: July 1, 2019
Glennmont Partners (“Glennmont”) has entered into an agreement to acquire a 25% stake in the Gode Wind 1 Offshore Wind Farm in Germany from current 50% owner Global Infrastructure Partners II (“GIP II”), a fund managed by Global Infrastructure Partners (“GIP”). The acquisition is the first offshore wind investment to be realised from Glennmont’s €850m Clean Energy Fund III, which achieved its final close in June.
Gode Wind 1 is a 330MW operating offshore wind farm in the German North Sea, currently being held in a 50/50 joint-venture between GIP II and Ørsted, a Denmark listed global offshore wind leader. In addition to Ørsted’s 50% ownership in the wind farm, it provides operations and maintenance services and a route to market for the power production.
The transaction is subject to approval by the competition authorities and is expected to be completed in Q3 2019.
The announcement follows The Renewables Infrastructure Group Limited (“TRIG”), a London-listed investment company advised by InfraRed Capital Partners, announcing earlier this month that it has agreed to acquire GIP’s remaining 25% stake in the Project. Following Glennmont’s acquisition the wind farm will be held by Ørsted (50%), TRIG (25%, subject to completion), and Glennmont (25%).
Joost Bergsma, CEO and Managing Partner of Glennmont Partners, said: “We are delighted to announce this important transaction as Glennmont’s first investment in the German offshore wind market and to be partnering with Ørsted, a recognized leader in the sector. Gode Wind 1 represents a high-quality offshore wind asset supported by a demonstrable track record of cash flow generation to deliver value for our investors.”
Glennmont’s Margam Green Energy Plant enters Commercial Operation
Date: June 24, 2019
The Margam Green Energy Plant, located three miles south-east of Port Talbot in south Wales, has entered commercial operation. The plant is owned by Glennmont Partners, one of Europe’s largest and best-known renewable energy fund managers.
The main contractor for the Margam power project, the consortium of Babcock & Wilcox Vølund and Interserve Construction, has now formally handed it over to Glennmont Partners. The renewable energy plant, fuelled by waste wood, will generate power for up to 75,000 homes.
Construction of the Margam plant started in 2016 and at one stage employed more than 400 people on site. Babcock & Wilcox Vølund (B&W) and Interserve worked in partnership with a large number of sub-contractors from Wales and other parts of the UK and continental Europe. The construction management of the power station was led by the Cardiff energy company, Eco2 Ltd.
Working closely with Glennmont, Eco2 now has management responsibility for Margam’s commercial operation as well as responsibility for Margam’s waste wood fuel logistics. B&W has operational and maintenance responsibility for the power plant. 25 people are directly employed at Margam.
Peter Dickson, Partner at Glennmont Partners said: “We are very pleased to see Margam fired-up and generating renewable energy for homes and businesses in south Wales. Margam is a long-term investment in Wales’s energy infrastructure.”
“Glennmont has appreciated the hard work of everyone to complete Margam’s construction: the efforts of B&W, Interserve, Eco2 and in particular the commitment shown by so many individual workers on site. We have had challenges along the way but I’m delighted to have reached this moment: seeing Margam generating renewable electricity into the grid.”
For further information, visit www.margamgreenenergy.co.uk
Glennmont Smashes Hard Cap Target For Clean Energy Fund III Raising €850m
Date: June 4, 2019
Glennmont Partners has successfully raised €850m at the final close of its Third Fund investing in clean energy infrastructure projects in Europe. It is the largest amount that has ever been raised for a green energy only fund with a European mandate. The over-achievement of the target for Fund III (originally €600m) was achieved because of the high level of interest in sustainable themes among investors, and due to the demonstrated success in investment, operations and divestment in the assets in Funds I and II.
Based in London, Glennmont is the world’s largest fund manager focussing exclusively on investment in clean energy infrastructure with assets of over €2bn currently under management. Glennmont has experienced robust growth over the past 6 years and is planning new products for investors seeking sustainable solutions.
Over 70% of Clean Energy Fund III will be invested in projects in the Eurozone with the UK also being an important market. The capital has been committed by a combination of new and existing investors from Glennmont’s two previous funds. Fund III generated demand globally from Japan, USA and European markets. Investors also include UK Local Authority Pension Plans such as Surrey Council, Southwark Council and East Riding Council, as well as the European Investment Bank.
The Third Fund will see investments in offshore wind projects across the EEA for the first time. Otherwise the Fund adopts a similar investment strategy to its predecessors targeting solar PV, onshore wind, bioenergy and small-scale hydro. The life of the Fund will span ten years and will target to-be-built and recently operational assets with stable, predictable cash yields underpinned by regulated and contracted revenues.
The successful closure of the Third Fund reinforces Glennmont’s reputation in clean energy infrastructure, their expertise for providing attractive risk-adjusted returns to investors and the strong growth opportunities that renewables continue to enjoy as an asset class.
Commenting on the final close, Glennmont CEO Joost Bergsma said:
“We are delighted to announce the successful closure of our Third Clean Energy Fund which has raised over three-quarters of €1bn. Institutional investors globally recognise that the energy transition and climate change is of key relevance to the performance of their portfolio. Glennmont’s investment strategy has proven to deliver good performance and predictable returns, and this strong demand from investors underlines the quality of the assets it invests in.”
Andrew McDowell, EIB Vice President responsible for renewable energy said:
“Climate change is the biggest environmental crisis of our age. As the EU bank we know that mobilising private capital is key to address this challenge. This is the second time we partner with Glennmont in the Clean Energy Fund, which will invest in key technologies necessary to drive the clean energy transition. We are particularly pleased to see the fund surpass its initial target size. This shows the impact public investment like the EIB’s can have.”
Connie Hedegaard, European Commissioner for Climate Action (2010 to 2014) said:
“The world is waking up to the need to redirect infrastructure funding to sustainable themes. As climate change becomes recognised as a global crisis, it is heartening to see that the trend is for increased flows of capital to Funds such as Glennmont’s. I am happy to have supported Glennmont events in the past and I wish them well for the future.”
Glennmont – Industry Update -12th Clean Energy Seminar 2019
Date: May 30, 2019
On 20th and 21st May at Tylney Hall, UK, Glennmont Partners held its twelfth annual seminar, bringing together key institutional investors and a range of renewable energy thought leaders to reflect, discuss and analyse the trends that are shaping our industry and promoting investment in the sector.
Our speakers included Professor Dieter Helm, Independent Chair of the Natural Capital Committee, Dr. Pierre Dechamps, Policy officer at European Commission Climate Action and Earth observation, Nick Lyth, Director at Green Angel Syndicate and Barnaby Wharton, Head of Policy and Regulation at RenewableUK.
Some of the key conclusions drawn from the seminar are as follows:
• Clean energy growth continues steadily; yet greenhouse gas emissions also continue to grow. Therefore, an acceleration of investment, regulation and policy will be needed to meet the COP 21 targets
• The European Union has committed to increasing its proportion of clean energy to 32% by 2032. A series of new policies will be needed to achieve this goal, underpinned by strong political endorsement
• Overall the EU’s objective is clear: deep de-carbonisation by 2050, fully consistent with the Paris Agreement, with a prosperous, modern and competitive economy
• Angel investing can play a key role to accelerate the development of new technologies, software solutions and processes
• Offshore wind is both a rapidly growing and de-risking sector. The UK has accounted for around 40% of total global offshore wind investment so far and is exporting its expertise to China, Taiwan and other markets
• A rapid increase in size and technological improvements has reduced the LCOE for offshore wind and forms the back drop for an acceleration of its roll out across Europe
For an in depth read on topics covered by our speakers at the Seminar, please click here:
Net Zero – The UK’s contribution to stopping global warming
Date: May 3, 2019
On 2 May, the Committee on Climate Change published a report on Net Zero – the UK’s contribution to stopping global warming.
Below follows a statement issued by Glennmont Partners Peter Dickson in response to this publication:
Technical Partner at Glennmont, Peter Dickson said:
“We welcome the findings from the Committee on Climate Change’s report advising the UK Government to adopt a target of net-zero emissions by 2050. If we are serious about achieving our decarbonisation goals, policymakers must encourage all forms of renewable power generation. This includes revisiting proposals for developing onshore wind in the UK, while continuing to make progress on deploying large-scale offshore wind and developing new technologies such as Carbon Capture Storage.
Investors are increasingly viewing fossil fuel-based generation plant as potentially stranded assets and are increasingly looking for opportunities to divest into new technologies that help to tackle climate change. Right across the spectrum we are now seeing significant amounts of institutional investment being poured into renewable technologies that is helping to decarbonise the energy system.
We look forward to this being further realised in the next round of Contracts for Difference (CFD) auctions for clean energy projects later this month, where we are expected to see bids below £50 per megawatt hour for the first time. This will be good news for the UK energy industry and underlines our long held view here that the industrial momentum lies firmly with renewables.”
Glennmont Partners 2018 ESG Report
Date: May 1, 2019
ESG has always been critical to Glennmont Partners’ ambitions. We consider it throughout our investment, asset management and divestment processes, and believe it to be crucial for delivering long-term sustainable value.
In order to advance our ESG activities, Glennmont has introduced a new design for our annual ESG report, expanding the content considerably. We will be reporting on a host of KPIs in a an ESG context and our report now contains information such as clean energy produced, water usage, and total community funding.
To further advance our ESG initiatives, Glennmont has begun mapping our ESG activities against the UN (“UN”) Sustainable Development Goals (“SDGs”). We have selected four goals that we will be reporting on annually: Goal 7, Affordable and Clean Energy; Goal 8, Decent Work and Economic Growth; Goal 12, Responsible Consumption and Production; and Goal 13, Climate Action.
For more on our latest ESG activities and to view our new report please click here
Glennmont completes sale of French 55MW Solar PV Portfolio
Date: April 16, 2019
Glennmont Partners has completed the divestment of a portfolio of five car park canopy solar PV projects in northern France. With a total operating capacity of 55MWp, the solar projects have been sold to the global solar independent power producer (IPP), Sonnedix.
The five solar PV car park canopy projects; Batilly (10.4MWp), Douai (11.9MWp), Flins (10.6MWp), Maubeuge (11.8MWp), and Sandouville (10.4MWp), commenced operations between December 2011 and January 2012.The sale continues to demonstrate the successful divestment of Glennmont’s Clean Energy Fund Europe I (“Fund”), which was fully invested in 14 onshore wind, solar PV and bioenergy assets across five geographies.
The sale also follows recent announcements of the sale of the Fund’s Portuguese solar PV projects to Cubico Sustainable Investments, French wind projects to Falck Renewables, and Italian solar PV to Tages. The Fund is now approaching the end of its divestments with upcoming sales expected to include Italian wind, UK and Irish wind, and UK biomass.
Joost Bergsma, CEO and Founding Partner of Glennmont Partners, said: “Glennmont is delighted with the outcome of this important sale of our French solar portfolio with appetite for assets showing no signs of abating. The deal further demonstrates Glennmont’s strategy of investing early in high quality assets and optimising these in the initial years of their operational life to facilitate a steady stream of cash flow generation. Over the past 11 years Glennmont has been actively compiling a large mixed renewable energy portfolio, and we look forward to delivering further value for our investors across the investment cycle.”
Axel Thiemann, CEO of Sonnedix, said: “We’re delighted to exceed 200 MW operating capacity in France in 2019. Our focus on operational excellence ensures all assets are quickly and efficiently onboarded to our global platform. The pace of growth in-country is being mirrored in our other Europe markets, as we actively seek to develop, build and acquire assets across our platform for the long term.”.
Glennmont Partners to renew Siemens Gamesa O&M service agreement for 255 MW in Italy for 10 years
Date: April 11, 2019
The contract comprises an overhaul of the previous O&M contract offered to the fleet including new services and upgrades for 236 wind turbines in different areas of the country
The 10-year contract also includes the operation of the turbines and full-scope maintenance services
Glennmont Partners reached an agreement with Siemens Gamesa Renewable Energy (SGRE) for the renewal of the O&M service agreement for its SGRE fleet, consisting of 236 wind turbines – 189 units of G52 (160.7 MW), 9 G80 (18 MW) turbines, 33 units of G87 (66 MW) and 5 G90 (10 MW) turbines – with a total output capacity of 254.7 MW. These turbines are at 12 wind farms in the provinces of Foggia, Messina, Agrigento and Chieti in Italy.
The renewal of the O&M agreement comprises new services and different upgrades, reducing the cost of energy and providing greater control over operation and maintenance costs. Under the contract, SGRE will also operate these turbines and provide full scope maintenance services for ten years.
SGRE has 2,050 MW installed in Italy and maintains 62 wind farms with a capacity of 1,608 MW, which accounts for a 78% of the total capacity installed. SGRE’s Service business unit maintains nearly 56,700 MW (onshore and offshore) in 62 countries.
“We are very pleased that we have reached such an important agreement, not only for its significant size, but also because it demonstrates our clients trust Siemens Gamesa and our expertise in securing the maintenance of their fleets. It also increases our footprint in such an important and competitive market as Italy,” said John Paul Larrañeta, Service CEO of Siemens Gamesa’s Southern Europe and Africa region.
Glennmont Partners’ total portfolio of renewable power plant constitutes nearly 1GW of mixed generation technologies across Europe, and its strategy is to expand this significantly over the coming years. Partner Francesco Cacciabue said: “We are delighted to cement our relationship with Siemens Gamesa through this agreement. It is an example of the strategic alliances that will allow us to achieve growth while managing risk and providing value to our investors”.
Glennmont Partners and Tages Capital enter into agreements for the sale of 85.4MW Italian Solar Portfolio
Date: January 2, 2019
London, 27 December 2018 – Glennmont Partners has entered into agreements to sell three operational, ground-mounted solar PV projects located in Veneto and Lazio, Italy, totaling 85.4MW, to Tages Capital.
The three solar PV projects, Enersol (48.0MWp), Megasol (13.2 MWp) and Phenix (24.2 MWp) projects, started operations in 2011 and are part of a combined deal in line with the divestment strategy for the first Fund of Glennmont Partners, one of Europe’s largest fund managers focusing exclusively on investment in clean energy infrastructure.
Following the Portuguese solar PV and French wind assets’ sale, the signing of this transaction is a further step towards the full divestment of Glennmont Clean Energy Fund Europe I (“Fund”), which was fully invested in 14 projects across five geographies. The Fund combined investments in onshore wind, solar PV and bioenergy markets. The deal helps to sustain Glennmont’s recent momentum with investors following the acquisition of Project Goudelancourt in October, a 16.8MW wind farm in France and the sale of a portfolio of five French onshore wind farms for €37m earlier this month.
With this latest acquisition, Tages Capital Sgr, through its infrastructure funds Tages Helios entirely dedicated to the photovoltaic sector, and Tages Helios II, which was launched at the end of July 2018 and has already raised €148m, is now the second largest player in the PV sector in Italy for total power capacity and assets for 309 MW.
Joost Bergsma, Chief Executive of Glennmont Partners, said: “We are pleased to announce this transaction with Tages, completing the third major sale of Glennmont Clean Energy Fund I. This transaction proves the quality and feasibility of Glennmont’s strategy from investment to divestment. The complexity of this transaction was underpinned by the level of expertise across our specialist teams at Glennmont. Our investment strategy is focused on investment performance and predictable returns, and this strong demand from investors underlines the quality of the assets we invest in. We look forward to releasing more value from our assets in Italy, France, and beyond.”
Umberto Quadrino, Chairman of Tages Holding, commented: “The acquisition of Glennmont’s portfolio is particularly important for Tages. It consolidates our position as Italy’s second largest photovoltaic player and completes the investment programme for Tages Helios, our first photovoltaic fund, while at the same time initiating investments for Tages Helios II, the new fund launched last July. Tages Helios has thus fully invested the €253m collected in high quality and return assets, as evidenced by the distributions to subscribers made so far. For Tages Helios II, this is an excellent start and will consolidate the ongoing funding effort”.
Glennmont agrees sale of French Wind Portfolio in €37m deal
Date: December 7, 2018
Glennmont Partners has agreed to divest a portfolio of five onshore wind farms in north-eastern and western France, totalling installed capacity of 59.5MW, to a wholly-owned subsidiary of Falck Renewables SpA, a listed company on the Italian stock exchange. The consideration for the sale is €37m, with the purchaser stepping into the existing project debt facilities in place.
The five onshore windfarms, Bois Ballay (12.5MW), Les Coudrays (10MW), Mazeray (12.5MW), Eol Team (12MW), and Noyales (12.5MW), commenced operations between 2006 and 2013. The divestment is expected to close in early 2019.
Glennmont Partners is one of Europe’s largest fund managers focusing exclusively on investment in clean energy infrastructure. The sale continues to demonstrate the successful divestment of Glennmont’s Clean Energy Fund Europe I (“Fund”), which was fully invested in 14 projects across five geographies.
The Fund combined investments in onshore wind, solar PV and bioenergy markets. It follows the recent announcement of the sale of the Fund’s Portuguese solar PV projects to Cubico Sustainable Investments in September and Glennmont’s acquisition of Project Goudelancourt in October, a 16.8MW wind farm located in Northern France. The next divestments to come for the Fund include French solar, Italian wind and solar, and UK and Irish wind and biomass.
Peter Dickson, a Founding Partner of Glennmont Partners, said: “We are very encouraged by this deal and by how attractive our French assets have proved to be for investors seeking a stable, yielding and financially de-risked power plant. Over the past 10 years, Glennmont has been actively compiling a very large mixed renewable energy portfolio. Investors can look forward to more of the same in 2019, both in France and further afield.”
Toni Volpe, Falck Renewables CEO, said: “This acquisition provides needed solidity to our presence in France, one of the most attractive markets in which we operate. We will reach almost 100MW installed in France, with a portfolio of assets and turbine technologies on which we can build further in terms of industrial optimization and long-term value extraction.”
The energy transition. A sustainable reality – Glennmont Partners Paris Seminar
Date: November 29, 2018
Glennmont Partners, together with BNP Paribas Asset Management, brought together key industry stakeholders and financial investors in Paris on Tuesday 27th November at a seminar discussing how renewables are driving the energy transition and the investment opportunities that this presents.
Joost Bergsma and Francesco Cacciabue Partners of Glennmont Partners and the BNP Paribas Asset Management team were joined by Alexis Gazzo, Partner at Ernst & Young, Xavier Daval, CEO of kiloWattSol and Nicolas Wolff, VP and General Manager – Western Mediterranean at VESTAS.
Attendees of the event explored the most recent trends in the European energy transition, the reduction of the cost of clean energy making them highly competitive and the expected continued rapid growth of clean energy infrastructure.
Keynote speakers discussed investment trends within the industry and considered how innovations in solar and wind within the sector are creating new economic opportunities.
Alexis Gazzo of Ernst & Young, who has over two decade’s worth of experience working in the clean energy sector, noted how solar and wind capacities in the European region will continue their strong development in the next decade.
The bulk of investments by 2027 will be concentrated in Germany, France, the UK and Spain. Investments are expected to be higher in wind technology compared to solar. Recent auction results worldwide confirm the decreasing cost and competitiveness of renewable energy technologies fuelling their continued growth. Also, battery costs are dropping and will soon constitute a competitive solution for power storage. Ernst & Young has identified 3 “tipping points” which will have a profound impact on future business models and investment opportunities – and forecast an acceleration of clean energy adoption.
Xavier Daval, as CEO of kiloWattsol has been working in the solar space sector for over twenty years looking at hundreds of solar projects across the world as a technical adviser. Xavier noted that solar can meet global energy needs very well. There is ample, free solar resource available and a strong match between levels of solar irradiation and where population density is highest.He noted that France is well placed to add more solar and the French target to achieve 40GW of solar by 2030 is entirely achievable. Solar costs have come down very significantly and the technology is one of the most competitive and highly complementary to wind energy.
Nicolas Wolff of Vestas highlighted the benefits of on shore and off shore wind. Costs have also rapidly come down and higher rotors and higher hub heights have allowed to capture more wind. Technology improvements, localised knowledge and economies of scale have matured the sector.Vestas is working closely together with its end customer and earlier in the value chain to deliver a more tailored and cost competitive products. Also, Vestas continues to evolve its technology and is looking for examples at multi-rotor turbines in on shore wind.
Climate Change and the Rise in Global Temperature: Insufficient Action at Present
Date: November 23, 2018
The ongoing Californian wildfires have caused a visible haze in the east coast skies of the United States – an alarming reminder of the adverse environmental conditions arising from climate change. In California, soil and vegetation has been dried out, the rainy season shortened, the Santa Ana winds shifted, and the jet stream slowed, leading to exacerbated wildfires. Other climatic changes and consequences can be expected elsewhere, and while there has been both investment in sustainable sectors from companies and innovative ideas from policymakers, it is not enough to avoid a global temperature increase beyond 1.5 °C.
Recent years have seen a great volume of global activity, from both the private and public sectors, aimed at limiting the rise in global temperature to 1.5 °C or 2.0 °C. Bloomberg New Energy Finance (“BNEF”) reports that in 2017 more clean energy was commissioned than ever before (a record 160 GW of clean energy generating capacity, excluding large hydro, globally) and expects global investment in clean energy in 2018 to be similar to that of 2017. Total installed capacity of wind and solar PV, as of August 2018, has grown 65-fold since 2000, and more than quadrupled since 2010. Other environmental sectors are set to experience similar rates of growth in the future. McKinsey’s electric vehicle adoption base-case scenario suggests that there could be a 15-fold growth in electric vehicles, from an estimated 8 million in 2020 in China, the EU and the United States to around 120 million electric vehicles by 2030 (a compound annual growth rate of around 130%). The energy and transport sectors, as well as other industries, are witnessing a substantial number of firms re-directing, and launching, efforts in order to support sustainable endeavours.
Meantime, in March 2018, the European Commission’s DG Fisma (the Financial Stability, Financial Services and Capital Markets Union Directorate-General) released its ambitious report ‘Action Plan: Financing Sustainable Growth’. Its proposals revolve around increasing clarity in the sustainable finance sector with proposals such as: establishing a unified sustainable finance taxonomy; formulating EU green finance labels; further defining institutional investor and asset manager sustainability duties; and furthering corporate reporting transparency. If all these proposals are implemented, capital inflows into sustainable finance activities in the EU can only increase as investors are better able to benchmark, report on, and manage the climate-related risks and returns of their investments.
While these activities are positive, they are insufficient. The IPCC’s Special Report on ‘Global Warming of 1.5 °C’, released in October 2018, has famously highlighted that “limiting global warming to 1.5 °C… require[s] rapid, far-reaching and unprecedented changes in all aspects of society”; global net human-caused CO2 emissions would need to fall by about 45 percent from 2010 to 2030. The implications of inaction are startling – if temperatures rise by 2.0 °C, tropical coral reefs will disappear, and even at 1.5 °C, we are likely to see a 70-90 percent decline in them, while 8 percent of plants, 6 percent of insects, and 4 percent of vertebrates are projected to lose over half of their climatically determined geographic range (rising to 16 percent, 18 percent, and 8 percent respectively at 2.0 °C).
The report also contains a number of scenarios setting out different routes to limiting the global temperature rise to 1.5°C. The lower the reduction in CO2 emissions in the short-term, the greater the CO2 removal from the atmosphere required in the long-term (for instance, using bioenergy with carbon capture storage schemes as well as changing land use practices, the former of which assumes the use of technology yet to be proven at scale).
Regardless of the specific scenario, meeting a 1.5 °C limit requires a massive increase in investment in sustainable practices. An article issued earlier this year in Nature Energy (note: prior to the IPCC Special Report) – estimated that an extra $458bn of investment in the low-carbon economy is required globally per year, for the next 12 years, to meet a 1.5°C limit. Six of the ten most destructive wildfires on record in California have occurred in the past three years – if supranational organisations, states, companies and the public do not take drastic actions now, the consequences will be even more dire later.
Glennmont to purchase a 16.8MW French wind project
Date: October 30, 2018
Glennmont Partners, one of Europe’s largest clean energy investment specialists, has entered into agreement to acquire Project Goudelancourt, a 16.8MW wind farm located in Northern France. The wind farm was developed and is currently under construction by Enertrag, a leading German developer that has installed over 660 wind turbines.
The wind farm is powered by seven Nordex N117 turbines and has secured a long-term operation and maintenance agreement with a reputable counterparty. The project has entered into a Power Purchase Agreement with EDF and benefits from a 15-year contract for difference tariff. ENERTRAG, as major service provider for technical management and maintenance across Europe with 1,400 turbines in its client portfolio, will continue to look after the technical and commercial operations of the wind farm.
DLA Piper acted as the legal advisor for the transaction, while Everoze acted as the technical advisor for Glennmont. Herbert Smith Freehills acted as the legal advisor for ENERTRAG.
The transaction marks the first acquisition of Glennmont’s Clean Energy Fund III, its third clean energy dedicated vehicle. With funds raised under this new vehicle, Glennmont is seeking to develop a diversified portfolio of renewable energy projects that includes wind, solar and biomass across different geographies, which delivers sustainable returns for its investors.
Francesco Cacciabue, CFO at Glennmont Partners, commented: “We look forward to completing this transaction which demonstrates Glennmont’s confidence in the clean energy sector across Europe as our investors enjoy an unprecedented yield from our funds’ assets. The complexity of this transaction was underpinned by the level of expertise here at Glennmont and we look forward to releasing more value from our assets, both in France and further afield, including the UK. The strong demand from investors underlines the quality of the assets we invest in, which offer deep market potential and a balance of yields and returns.”
Simon Hagedorn, Head of Finance and M&A at ENERTRAG, said: “We appreciate strengthening our mutually beneficial cooperation and are looking forward to new ventures with Glennmont. By providing the technical and commercial management services, ENERTRAG remains involved on a long term basis in a project started from scratch in 2007.”
Glennmont’s new Fund, as with its previous ones, will invest across a range of renewable energy technologies in the UK and across Europe. With onshore wind representing a key strategic market, Glennmont aims to increase its presence through deploying up to €300m in this sector alone in the coming years with the ultimate goal of forming a large portfolio of complementary power plants
Renewables at the centre of the energy transition: An investment opportunity
Date: October 18, 2018
Glennmont Partners, together with BNP Paribas Asset Management, brought together key industry stakeholders and financial investors in Rome on Friday 12th October at a seminar discussing how renewables are at the centre of the energy transition and the investment opportunities that this presents.
Francesco Cacciabue, Partner and CFO of Glennmont Partners and the Glennmont team were joined by Tommaso Barbetti, Founding Partner at Elemens, Alessandro Mancino, VP Sales and Marketing at Siemens Gamesa Renewable Energy and Valerio Capizzi, Head of Energy EMEA at ING Bank.
Attendees of the event explored the objectives of the European Union in terms of renewable energy and the need for investment in the sector, as well as the energy transition path of European countries and the evolution of financing. Keynote speakers discussed investment trends within the industry and considered how technical innovations within the sector are creating new economic opportunities.
Tommaso Barbetti, who has over a decade’s worth of experience working in the clean energy sector, noted how the new RED II directive opens up an unprecedented market, with the new European target for renewable energy sources by 2030 being set at 32%. In an investment overview, Tommaso further noted that in the short term, it is expected that there will be more investment in wind than in solar, with solar then overtaking wind in 2023.
Alessandro Mancino, who has been working in the renewable energy sector for over 10 years, noted in his presentation the competitive cost of energy that onshore wind installations present. He further commented on the break-through innovations within the industry that mean by the early 2020’s, even more powerful next-generation turbines will be available – something that Siemens Gamesa Renewable Energy is well positioned to deliver.
Valerio Capizzi, an expert in project finance and structured finance, highlighted how over the last five years, financing from banks into renewables has steadily increased, noting that in Europe wind energy attracts more than 50% of bank financings. He went on to acknowledge the fact that investors and consumers are now more sensitive to sustainability, and that banks have widened their traditional range of products to accommodate for this.
The seminar provided an opportunity for investors and industry stakeholders to discuss key points relating to financing in regards to renewable energy and allowed attendees to gain invaluable insight into the future of renewable investment and of the sector more widely. Glennmont is pleased to be delivering seminars such as this, which bring together key sector voices and help cast light on financing and investor trends within the renewable industry.
Glennmont enters into agreement for the sale of 29.4MWp Portuguese Solar Portfolio
Date: September 11, 2018
Glennmont Partners has entered into agreements to sell three operational, fixed-tilt, ground-mounted solar PV projects in the Algarve, Portugal, totalling 29.4MW, to Cubico Portugal Solar Holdings S.A., a company owned by Cubico Sustainable Investments.
Glennmont Partners is one of Europe’s largest fund managers focusing exclusively on investment in clean energy infrastructure. The three solar PV projects, Avalades (15.8MWp), Ferreiras (6.8MWp) and Sol Cativante V (6.8MWp) projects, started operations in 2012 and 2013 and are part of a combined deal in line with Glennmont’s divestment strategy for its first Fund.
The completion of this transaction is the first step towards the full divestment of Glennmont’s Clean Energy Fund Europe I (“Fund”), which was fully invested in 14 projects across 5 geographies. The Fund combined investments in onshore wind, solar PV and bioenergy markets.
This transaction leads the way for the next divestments to come for this Fund, which includes French and Italian wind and solar, as well as UK and Irish wind and biomass.
Scott Lawrence, a Founding Partner of Glennmont Partners, said: “We are pleased with the closing of this deal with Cubico. Glennmont has been an active investor in Portugal for a number of years and we believe our strategy for the Portuguese market has allowed us to continue to find and deliver value across a diversified portfolio of power generation assets. These solar assets have performed well for us since we built them, and believe they will continue to do so. Glennmont was formed in 2007 with a specialist focus on clean energy infrastructure investments and our team continues to identify, secure and add value to some of the best clean energy generation assets in Europe”.
David Swindin, Head of EMEA at Cubico said: “This is a unique acquisition for Cubico and adds to our growing portfolio of renewable energy assets with very strong contracted revenue profiles. These particular projects will help us to achieve scale in Portugal, leaving Cubico better placed for future opportunities in the market while increasing the capacity of our Iberian portfolio.”
Glennmont Partners features in Infrastructure Investor Energy Transition Report
Date: June 8, 2018
Infrastructure Investor one of the leading infra investment magazines decided to dedicate a special issue on the Energy Transition for its June edition. The magazine highlights that Energy Transition as an investment opportunity within infrastructure. It is the number one theme inside infrastructure. Bruno Alves – the magazine’s senior editor states that:
“ it’s no exaggeration to call the ongoing energy transition the biggest global investment opportunity of the century. Historians will look back on this as a pivotal period, when the world weaned itself off fossil fuels and started on a sustainable energy path – though whether that will be enough to counteract the worst effects of climate change remains to be seen… What is entirely certain, is that the energy transition is, at heart, very much an infrastructure story – one anchored by renewable energy generation.”
Glennmont – as a leading European clean energy infra manager is of course featured in this issue – giving its perspective on a range of current topics. Glennmont notes that Europe offers a deep set of brownfield opportunities. Also, Glennmont is enthusiastic about offshore wind, particularly how quickly it’s weaned itself off subsidies. And, while Glennmont acknowledges there is a lot of capital out there, that money has been chasing large deals, which leaves plenty of opportunities for mid-market managers such as Glennmont.
Please find attached a link to the roundtable interview – including Joost Bergsma, Glennmont’s CEO – the feature piece in the magazine here.
Glennmont Partners 11th Annual Clean Energy Seminar 2018, Seville
Date: June 6, 2018
On the 22nd and 23rd of May in Seville, Spain, Glennmont Partners brought together, for its eleventh annual seminar, key institutional investors and a range of renewable energy thought leaders to reflect, discuss and analyse the trends that are shaping our industry and promoting investment into the sector.
Some of the key conclusions drawn from the seminar are as follows:
The Spanish renewable energy space is seeing a new dawn thanks to the new auctions. Over 4,000 MW has been successfully auctioned with a lot of parties interested to offer Power Purchase Agreements
Private Yieldco and DevCos may offer long term institutional investors, assisted by specialist renewable energy assets managers, access to significant pools of long term power generation assets
Changes in regulation are bringing in a new paradigm in the management of renewable energy assets. Supplicated software and access to real live and historic data can unlock active asset management and ensure a more dynamic performance against market price fluctuations by limitation or plant stop (active management)
New structural engineering assessments are able to prove whether wind projects’ lives can continue to operate effectively for up to 30 or even 40 years
For more highlights from the event, please click here
Glennmont Partners in Clean Energy Pipeline
Date: April 16, 2018
CEO of Glennmont Partners, Joost Bergsma spoke with Clean Energy Pipeline following the announcement in January that Glennmont are seeking to invest and accrue a 500 MW portfolio of renewable energy assets located across Europe as part of Clean Energy Fund III.
The fund will target both construction-ready and newly operational projects Bergsma explained: “With a portfolio of 500MW, we can build a significant portfolio of assets with diversification both technologically and geographically, without being forced to pursue large mature assets where the expected cost of capital will be lower.”
For more information, please visit this link:
Infrastructure investment opportunities in UK and Europe 2020-2030 Seminar
Date: March 19, 2018
On 15th March 2018, in London at the House of Lords, Glennmont Partners brought together key institutional investors, former Government clean energy policy makers and a range of Industry experts to discuss and analyse the political support for clean energy and the investment opportunities and trends for 2020 to 2030 in UK and Europe.
The following key observations were noted:
• Gordon Edge looked ahead to what the 2030 Clean Energy Market may look like. Gordon highlighted that mechanisms to take away price risk would still be necessary for renewable energy investments to be made as renewable infra structure are characterised by high upfront capital costs and very low marginal costs. This is a conundrum as clean energy moves to a zero-subsidy world. To ensure capital costs are made at the optimal WACC – someone needs to take the price risk away.
• Gordon predicted from his long-standing experience in the renewable market that projects would be underpinned by different streams of capital comprising of a) electricity revenues (these could be derivate style, contracts for differences, floor price ppa) b) capacity market payments inflows or outflows and c) system services. Technology (both storage and also demand response systems) would facilitate these payment streams.
• Angus McCrone said that investment in renewables globally continues at a steady pace. In 2017, globally over US330bn was invested in new renewable power. This is the eighth year in a row where more than USD250bn was invested in clean energy which continues to outstrip investments in conventional power by a significant factor. Solar was the biggest segment, followed by wind and particular China installed a record 55GW of new solar.
• Angus said that Europe is continuing also at a steady pace with off shore wind taking up a bigger part of the capital flows.
• Also, institutional capital played a big role in financing European investments in particular. This kind of finance came in through multiple pockets including direct investments, fund investments (taking up the largest share) but also project bonds and listed
• Finally, Angus highlighted that battery costs are declining and that the number of storage projects is increasing.
• Barbara Boos explained that the European Investment Bank has been and continues to be one of the most active investors in renewable infrastructure as a fund LP.
• Barbara emphasised that Renewable technologies have rapidly matured into established and reliable low costs technologies. This goes beyond just economies of scale and cost declines. But also, significant positive learning – managers, builders, operators gain experience on lead-times, real costs and methods – have been made reducing project construction times. Also, there has been an evolution of industry standards and counter-selection of best suppliers.
• Barbara mentioned that wind and solar are decentralised, modular and scalable systems – so it is significantly easier to fix and replace single turbines or panel than dealing with break downs in conventional large-scale power plants.
• Also, Barbara pointed out that RE is a powerful method to address power access to less developed geographies with limited grid investments. It can help redefine labour market and working conditions of people working in energy related industries
• The panellists agreed the clean energy market is evolving rapidly and that the significant new growth can be attained as market participants find new ways on the back of technology and further policy making.
Wind Energy Development & Investment Conference- Glennmont Partners pre-conference interview
Date: March 12, 2018
Wind Energy Investment & Development Europe WIND 2018 is an annual flagship conference organised for the wind energy sector in Europe by The Voice of Renewables – a leading renewable energy intelligence and media company. WIND 2018 conference will take place in The Hague Hilton hotel in The Hague, The Netherlands on 24/25 May 2018.
During WIND 2018, Mr Joost Bergsma will take part in the panel discussion:Financing and developing European onshore wind energy market.
The Voice of Renewables: Mr Bergsma, thank you very much for finding time in your busy schedule to speak to us.
At the upcoming WIND 2018 conference in The Hague you will be taking part in the panel Financing and developing European onshore wind energy market. Renewables and other infrastructure projects tend to have long-term, low-risk characteristics, including the promise of stable cashflows, which are often inflation-linked. They also provide diversification and, given their relatively illiquid nature, offer a premium over other investments. What makes Glennmont invest in wind energy?
Mr Joost Bergsma: Glennmont invests in wind energy for a variety of reasons. Chief among them is that wind energy forms the largest segment within European renewables in terms of volume and has been around for a relatively long time – this allows us to be selective when it comes to choosing which assets to invest in, as well as to subsequently achieve significant economies of scale during operation. The scale and maturity of the sector has also resulted in assets with proven technologies, provided and guaranteed by experienced manufacturers, and serviced and managed by reliable counterparties.
The Voice of Renewables: Onshore wind is set to be the cheapest form of electricity generation and it can be deployed quickly. Yet, with rapid development of European offshore wind and falling prices of solar energy generation – the future of European onshore wind is not all that clear. What are, in your opinion, future prospects of this branch of wind power generation and what are the best ways to best make it attractive to investors?
Mr Joost Bergsma: We are quite optimistic about the onshore wind industry in Europe, and believe that there will continue to be a prominent role for it in the energy mixes of countries across Europe. Capacity factors are increasing while both direct and indirect costs are falling and this creates attractive equity and debt financing propositions. Repowering is also providing an additional route for investing, and is something which bodes well for the industry’s prospects.
Of course, the wind energy industry will increasingly need to manage more effectively the intermittency of wind production as the size of the sector, relative to other sources of energy, continues to grow. But we believe that developments in forecasting, data analysis, and energy storage all indicate that the risks of intermittency from a grid perspective can be adequately mitigated.
The onshore wind sector can be made more attractive to investors primarily by allowing it to continue along the lines that it has been developing in recent years – increased specialisation of actors, further development of contractual packages and mechanisms, and greater technological and financial innovation.
The Voice of Renewables: Speaking of wind power generation, what is your company preferred investment strategy?
Mr Joost Bergsma: Glennmont’s investment strategy has not changed very much over the past decade. We have always sought to achieve a balanced mixture of capital appreciation and cash flow generation (income) by investing across the clean energy value chain with a focus on lower risk, cash flow backed clean energy assets which utilise proven technologies, such as bioenergy, solar PV, and wind.
We have also always focused on medium sized, off-market assets which benefit from secure and long-term operational contracts. These assets are predominantly either to be built or operational; our funding of development stage projects is highly selective. We then create value through the active management of the resulting aggregated portfolio, realising gains through refinancing opportunities, economies of scale and enhanced performance.
The Voice of Renewables: As the wind power industry grows, many actors appear on the investment stage – institutional and private investors, pension funds, insurance companies, energy utilities, event large municipalities. What, in your opinion are the most important investment parties to keep the investment – and therefore the industry – sustainable?
Mr Joost Bergsma: There is not a single most important party. Sustainable onshore wind investment will be carried by many different parties each playing a specific role, according to their risk appetite and the services that they provide. Funds can help raise equity and debt capital and de-risk and cluster assets, pension funds and insurance companies may be interested in benefiting from cash yield as the long-term owners of assets, and corporates and utilities can write PPAs with the aforementioned parties and so on. Clean energy is very much distributed energy – i.e. smaller scale and local – which is a shift in paradigm from how the utility sectors has been traditionally organised where large scale single site investments were made. The volume of distinct parties involved in the wind power industry are key to making it an interesting space to work in, and to its sustainability – the strength of the competition encourages best practice.
The Voice of Renewables: Investing is never a simple game. What do you see as the biggest investment risk in wind?
Mr Joost Bergsma: The risks associated with onshore wind have fallen a lot in recent years, as the industry matures and the knowledge of the parties involved improves. In particular, regulatory risk has come down and operational risk is cheaper to manage. The largest risk is still public opinion, such as not in my backyard type attitudes. We still need taller towers or more sites to provide the necessary onshore wind capacity and these opinions do not help. This investment risk is, of course, relevant primarily to those companies endeavouring to finance projects still seeking various planning approvals, though it also has a risk implication for projects with government-backed support schemes as well. Storage technology will also be important for the further roll out of onshore wind, and I suppose carries its own technology specific risks.
The Voice of Renewables: BNEF’s long-term forecast anticipates wind and solar costs will fall sharply over the next 25 years and onshore wind and solar will be “the cheapest ways of producing electricity in many countries during the 2020s and in most of the world in the 2030s”. Where in Europe you see the biggest potential for further development of wind installations in next five years?
Mr Joost Bergsma: With regard to space and wind resource, Poland, Spain and Sweden currently have a lot to offer, and are consequently regions in which Glennmont and other clean energy investors regularly examine projects. However, the more mature markets are also likely to remain attractive, in particular France and Italy have been very good at consistently delivering new programmes to support renewable energy, with the exception of Italy’s cuts to feed-in tariff payments for certain solar photovoltaic projects.
The Voice of Renewables: What do you currently perceive as the greatest obstacle to wind development in Europe?
Mr Joost Bergsma: Not in my backyard attitudes, both from local and national government seem to remain the greatest obstacle. In the case of the UK, for instance, I can understand that offshore wind should get priority but the effective halting of new onshore wind in the UK is both a commercial and environmental mistake – it is a purely political decision.
The Voice of Renewables: Traditionally, energy grids radiate energy from relatively few large power sources to the end users. As dependency upon renewable energy increases, what changes, in your opinion, must be implemented on the wind-to-grid infrastructure?
Mr Joost Bergsma: There are a few key changes that I expect will need to occur: first, energy producers and consumers will need to develop more accurate production and consumption forecasting tools; second, more sophisticated real time availability tools will need to be developed to complement forecasting and supply- and demand-side response systems; third, local short-term storage options will need to improved; and fourth, grid curtailment systems will need to be refined.
The Voice of Renewables: Let’s talk about blockchain for a moment – it is seen by many as a gateway to a new energy world, a world where energy is decentralised, digitised and decarbonised. It is said to make utilities and grid operators become more efficient by balancing supply and demand in real-time and supporting renewable energy integration into the grid in a cost-effective fashion. On the other hand, the intangible and comparatively small nature of EE assets and projects discourages traditional bankers and investors from dipping a toe into this area. The elusiveness of EE benefits is a significant drawback to potential investors. Contrary to other investments, energy efficiency cannot be directly measured in terms of incremental physical production.
Where do you stand on this missing link for renewable energy investment?
Mr Joost Bergsma: Energy efficiency is clearly very important for decarbonisation objectives and it is evident that more can be done in terms of regulation at national and EU levels where companies have clearer incentives to implement energy efficiency programmes. We have historically looked into investing in energy efficiency projects but it seemed difficult to make them scalable or replicable. This was in part due to the difficulties associated with adapting existing stock, for instance old buildings. However, I am not an expert in this field.
The Voice of Renewables: Finally, our last question: what would be the most crucial piece of advice you could offer to developers and investors who want to get involved in onshore wind energy in Europe?
Mr Joost Bergsma: I would offer two pieces of advice. First, get a good team. Glennmont’s work is made possible only through the complementary skill sets offered by the individuals within the team. They bring technical, legal, financial and structuring experience to the firm, all of which are essential to what we do. Second, diversify your projects by geography. This mitigates not only regulatory risk but also weather risk, and the value of it should not be overlooked.
Thank you very much for the opportunity to be interviewed.
The Voice of Renewables: Mr Bergsma, thank you very much for your time today and we are looking forward to meeting you in The Hague on 24th of May.
End of the interview.
Global green energy drive `too advanced´ to be halted by Trump, says Glennmont Partners
Date: February 20, 2018
The founders of a major clean energy fund have shrugged off Donald Trump’s shift away from renewable power, claiming the global industry is too advanced to be halted by the US president.
Peter Dickson, technical director of Glennmont Partners, said the renewable energy sector was now driving itself after cutting loose from state-backed subsidies and attracting an influx of private investment.
Mr Trump has moved to break up Barack Obama’s environmental legacy by pulling America out of the 2015 Paris climate accord and backing carbon-intensive power sources such as fossil fuels.
Despite the US president’s crusade, Mr Dickson said institutional investors were wary of the risks surrounding coal and gas power stations and were more attracted to the falling cost of green energy.
Speaking to the Press Association, Mr Dickson said investors are concerned that fossil fuel power projects could become “stranded assets” if the global push for decarbonisation sparks regulatory change.
He said: “Despite things we hear from President Trump, the policy around renewables has almost gone beyond that point now.
“We are at that point where things are starting to become self-propelled and the incentives themselves are no longer coming from Government, but from the economies of scale and the value of the assets themselves.”
Glennmont, which raises long-term capital to invest in wind farms, biomass, solar parks and hydro plants, has 937 million euro (£831 million) under management. The group is currently eyeing European investments following the launch of a third clean energy fund in January.
Chief executive Joost Bergsma said the profile of its investors had changed since it broke off from BNP Paribas 10 years ago, with medium-sized pension funds joining large institutional investors, sovereign wealth funds and insurance companies.
The group is also seeing a growing interest from Asian investors, who are keen to broaden their horizons from riskier, high-return, investments towards the type of steady income generated from green infrastructure.
On Brexit, Mr Dickson said a number of firms had domiciled their funds in Luxembourg to shield them from the uncertainty surrounding Britain’s EU divorce.
He said Glennmont was largely “immune” to Brexit disruption because the Climate Change Act 2008 means the UK’s decarbonisation target will remain in place once the UK quits the bloc.
He added: “If it wasn’t for that, we would probably be in a more volatile place this year, but that establishes our 2050 target for decarbonisation and we have no choice but to continue along that path.
“We cannot doubt that the trajectory we are on remains solid, and with that the UK remains a good market.”
Glennmont seeks more than 500MW of investment opportunities in clean energy infrastructure assets with expanded investment capacity
Date: January 16, 2018
Glennmont Partners has expanded its investment capacity in the clean energy infrastructure space and now has three funds under management – these are Fund I (2010) and Fund II (2013), which are fully invested, and now a new third Fund (2017). Opportunities are being sought for a portfolio of clean energy infrastructure projects in Europe. Glennmont is one of Europe’s largest investors focusing exclusively on investment in clean energy infrastructure. This announcement follows the successful refinancing of Glennmont’s 245MW Italian wind portfolio in October and the refinancing of the Sleaford straw-fired biomass plant in September – amounting to around €340m of capital raised over the course of 2017.
Glennmont’s strategy remains consistent with its past experiences: it seeks to invest in solar PV, offshore and onshore wind, bioenergy and small-scale hydro across the EEA; it will target to-be-built and recently operational assets with stable, predictable cash yields underpinned by regulated and contracted revenues.
Glennmont’s investment strategy is consistent with its prior portfolios of 355MW and 500MW respectively and is evidence of the growing importance of clean energy in the European energy portfolio. Fears of reduced profitability due to reducing government support schemes have been offset by the falling costs of renewable power produced; many new routes to market for power, such as the corporate PPA market; and the extension of a number of government support schemes.
Commenting on the search for investments, Glennmont CEO, Joost Bergsma said:
“Glennmont continues to believe that the clean energy market is attractive to investors and delighted to have expanded its investment capacity allowing us to continue to find and deliver value across a diversified portfolio of power generation assets. When we formed Glennmont in 2007 we were clear that our specialist focus on clean energy infrastructure investments would allow us to set the standard for the clean energy industry. Our Investment and Asset Management teams work together to identify, secure and add value to some of the best clean energy generation assets in Europe”.
Christopher Knowles, Head of EIB’s Infrastructure Fund and Climate Action Team said, “EIB welcome the announcement by Glennmont Partners that it has returned to the clean energy investment market and is investing its third clean energy fund. This news is indicative of the momentum behind the global shift towards low carbon technologies that we are seeing currently. With investment in clean renewable energy at record levels we can look forward to a similarly successful year in 2018 as we continue to drive innovation, create high value jobs and tackle climate change.”
Glennmont acknowledges the financial support provided by the European Investment Bank with the backing of the European Union through benefits from a guarantee from the European Union under the European Fund for Strategic Investments (“EFSI”) further to an agreement on the management of the EFSI and on the EU guarantee to be provided by the European Union entered into on 22 July 2015 by the EIB and the European Union, as amended, supplemented or restated (the “EFSI Agreement”).
Glennmont Partners Complete €190m Refinancing Of 245MW Italian Wind Portfolio
Date: October 27, 2017
Glennmont Partners has successfully completed the refinancing of SER for €190m, one of Italy’s largest operating wind portfolios, with 245 MW of installed capacity. The transaction is Italy’s first bond ever in the wind sector and is part of Glennmont’s ongoing activities to realise additional value from its operational assets. It follows last month’s successful refinancing of Glennmont’s Sleaford biomass plant in the UK for £150m.
The SER portfolio is made up of 231 wind turbines across Sicily and Puglia, all of which entered into operation between 2009 and 2012. The portfolio was acquired in June 2016. The refinancing has replaced part of the original project finance debt, from nine financing banks, with one bond listed in the ExtraMOT segment of Borsa Italiana, provided by certain investors managed and represented by a large financial institution. The transaction reinforces Glennmont’s reputation for providing attractive risk-adjusted returns to investors, based on predictable cash yields underpinned by regulated and contracted revenues.
Francesco Cacciabue, CFO at Glennmont Partners, commented: “We are delighted to complete our second major refinancing in a month. This transaction demonstrates Glennmont’s confidence in the clean energy sector across Europe as our investors enjoy an unprecedented yield from our funds’ assets. The increasingly sophisticated financing options open to clean energy asset owners give us the opportunity to realise large amounts of capital and to enhance the overall value of our funds. Investors can look forward to more of the same in the coming months”.
Claudio Vescovo, Investment Director at Glennmont Partners, said: “The complexity of this transaction was underpinned by the level of expertise here at Glennmont and we look forward to realising more value from our assets, both in Italy and further afield. We are pleased to have structured the first ever wind bond financing in the country leveraging on our in-house expertise. The strong demand from investors underlines the quality of the assets we invest in, which offer deep market potential and a balance of yields and returns”.
The refinancing was successfully arranged by Natixis and Unicredit acting as Structuring MLAs and Bookrunners which also provided a liquidity facility. DNV GL acted as the technical adviser, PwC as the tax adviser, and both Orrick Herrington & Sutcliffe and Gianni, Origoni, Grippo, Cappelli & Partners who provided legal advice to the borrower and lenders respectively
A short video introduction to the SER portfolio can be seen here: http://www.glennmont.com/news-media/asset-videos/.
Energy Transition – Generating returns in the circular economy
Date: October 26, 2017
Glennmont Partners have continued their series of conversations with institutional investors with two more seminars in Frankfurt and Munich.
Both seminars were structured to give exclusive and insightful access to key players who manage risk and create value on behalf of project funders. As in previous events, the seminars were focussed on a narrow theme, in this case the means of managing risk in the cases of biomass and offshore wind related investing.
Emilio Lopez, the CEO of Gestamp Biomass, is one of the world’s leading proponents of biomass power generation and has managed the development, construction and operation of plants across several continents.
Emilio demonstrated that a considered and structured approach to biomass project development can reduce risks and deliver a secure cash generative project. Emilio’s case was supported directly by Paul Battelle, the Director of Infrastructure and Energy at Deutsche Bank. Paul showed a number of case histories where the bank was able to add value through creative financing driven by secure cash flows.
In the offshore wind field, Peter Esmann, one of Siemens Offshores Leading Product Managers, showed how lowering risks and reducing the cost of construction was driving down the cost of energy generated from offshore wind.
Peter was able to demonstrate the extreme conditions that the components of offshore wind turbines are subjected to in order to provide security of production for investors. His case was backed up by Andrew Cole, Associate Director at Wood Group – one of the world’s leading energy engineering companies. Andrew systematically demonstrated that all risks associated with offshore wind are laboriously assessed in the process of due diligence for investment.
The seminar was able to reinforce the point that, while offshore wind and bioenergy are perceived as above average risk for investors, by adopting a considered and conservative approach and by working with highly experience counterparties, it is possible to enhance returns without taking on a disproportionate level of risk.
The decarbonised power sector – further value from bioenergy?
Date: September 11, 2017
As I write we have just received the results of the Contracts for Difference (CFD) auction round for sustainable energy projects and it is clear that offshore wind projects have gained a significant amount of support for the new generation of deeper water, larger generation stations. By 2023 3.2GW of new generation capacity will be operating off the shores of the UK. What has also gained attention in this morning’s press is that the clearing price, at which the auction for this capacity was won, is a mere £57.50/MWh for delivery in 2022/23. This is a remarkable feat for an industry that only a few years ago was considered by many to be an expensive folly.
This is great news for the UK energy industry and for the offshore construction industry in general and it ensures an ongoing effective decarbonisation of the UK power portfolio. But alongside the 3.2GW of offshore wind is also a further 64MW of waste to energy utilising Advanced Conversation Technologies and 86MW of dedicated biomass with chp (combined heat and power). The CFD round supports projects from Pot 2 – the ‘less established’ technologies which includes these technologies along with Anaerobic Digestion (AD). While the progress of development of offshore wind is truly remarkable, it is also worth noting the opportunity for economic and social development presented by these thermal technologies.
Bioenergy in all of its forms is the only renewable energy source currently economically available in the UK that can provide reliable base load power. Variable sources of power production can create a need for balancing power to be provided to the grid at considerable expense and technical complexity. This is one of the main criticisms of renewable power picked on by critics as a reason to doubt its effectiveness and economic viability. Bioenergy on the other hand is entirely schedulable and can itself be used to balance the network. Further, bioenergy is not limited to locations where natural sources of power such as wind-, solar-, or hydro-energy exist. Biomass is an energy carrier in the same way that coal is and power can be provided where it is wanted and stored until it is wanted. This makes bioenergy ideal for on-site generation providing off grid energy solutions for energy intensive users. This is particularly the case when CHP solutions can be offered, providing both heat and power to customers.
Bioenergy feeds numerous value chains: the production and procurement of fuel is an industry in itself, creating economic value and wealth. Bioenergy is providing a market for waste wood at a time when the paper and pulp industries are in decline. Forestry needs management if it is to be an effective means of sequestering carbon. Derelict, unmanaged woodlands may produce as much greenhouse gases and they absorb, worse still, rotting forestry may produce complex hydrocarbons such as methane gas, a much worse greenhouse gas than CO2, whereas well managed, worked forests absorb carbon effectively balancing the use of biomass in energy production. The use of agricultural residues provides valuable additional income streams for farming, an industry that is continually under economic pressure in global markets and even more so in the UK now we are leaving the EU.
Bioenergy-based power production creates far greater sources of employment than variable sources of sustainable power particularly in the operational phase. A 40MW biomass power plant will provide direct employment for 30 to 40 staff on site working in shifts and support hundreds more indirectly in service industries and fuel production.
There is a growing consensus for the need of a ‘Circular Economy’, an initiative to provide sustainability to local and national economies, ensuring that resources are used and reused effectively. Bioenergy fits perfectly within the circle of sustainability, adding value to end-of-life materials, reducing the uptake of virgin materials and reducing waste. The UK, for instance, has been exporting significant tonnages of refuse-derived fuel to continental Europe to avoid landfilling at home. This material has clear economic value. It is somewhat ironic that this trade is also now uncertain given the ongoing Brexit trade discussions, yet it can create a valuable source of energy in the UK as a clear manifestation of the Circular Economy.
A modern bioenergy plant is a clean, wealth creating, employment providing source of energy that supports local industry and national power systems while contributing to the mitigation of climate change and reducing waste. There is no doubt that, while the CFD round will undoubtedly spell good news for the offshore wind industry, investors, policy makers and the wider sector may find advantage paid more attention to the added value and opportunities for wealth generation of bioenergy.
By Peter Dickson, Technical Partner at Glennmont Partners.
Glennmont Partners Completes Refinancing of Sleaford Biomass Plant for £150m
Date: August 23, 2017
Glennmont Partners has successfully completed the refinancing of the Sleaford Renewable Energy Plant on behalf of its dedicated clean energy fund, Glennmont Clean Energy Fund Europe I, as a part of a programme of realisations of value from the Fund. Glennmont Partners is one of Europe’s largest fund managers focusing exclusively on investment in clean energy infrastructure. Glennmont raises long-term capital to invest in alternative power generation projects including wind farms, biomass power stations, solar parks and small-scale hydro power plants. The carefully selected, risk managed investments deliver sustained performance and predictable returns over periods of 10 years or more.
Sleaford REP is a 40MWe straw-fired biomass plant located in Lincolnshire, UK. The plant has been in operation since 2014 and is being operated by Burmeister & Wain Scandinavian Contractor (BWSC). The plant benefits from 2 ROCs under the UK renewable energy regime as “good quality CHP plant”, providing free heat to the local community under long term offtake contracts. The proceeds from the refinancing repaid a project financing, and contributed to directly creating value for investors.
The £150m financing has been placed to a large European institutional investor and is the largest institutional-only financing in the UK biomass sector to date. Deutsche Bank acted as sole lead Arranger, Agent, Security Trustee and Account Bank for the transaction.
Joost Bergsma, CEO of Glennmont Partners, said: “Glennmont is delighted to be completing one of the largest biomass transactions of 2017 for £150m. This transaction further highlights that biomass is a highly efficient renewable energy technology capable of attracting significant amounts of long term, competitive institutional capital. The refinancing complements our strategy of building portfolios of renewable projects diversified by both geography and technology in order to provide predictable returns to investors. The energy market is as diverse as it has ever been with new technologies and new market structures offering investors a wide range of opportunities to invest in clean energy.”
Michael Volkermann, Head of Infrastructure & Energy at Deutsche Bank said ““We are delighted to build on our close relationship with Glennmont Partners by together delivering this pathfinder refinancing transaction for the UK biomass industry and placing it with a leading European infrastructure debt investor.”
Beyond the tipping point
Date: August 3, 2017
For a Fund Manager, especially one with a specialist fund that is aligned with a specific world view, it is encouraging to see media reports that resonate with the pitch, in recent months we have not only had a resonance but a crescendo of reports supporting the acceleration of sustainability in the clean energy sector. We were delighted to comment in the recent article by Business Journalist, Jillian Ambrose in the UK Sunday Telegraph on 30th July, The electric jolt that roused Big Oil and we note that it corresponds to a growing number of complementary reports.
For a number of years independent commentators have been charting an exponential increase in flows of capital and investment in sustainable energy and a corresponding decrease in investment in the conventional power sector. In our own investor meetings we are increasingly hearing about fears of stranded assets in the coal, oil and nuclear sectors. We agree with the Telegraph that it is hard to identify the tipping point, but given the influence of institutional capital in the power sector it probably reached that point when the large global institutions started to decarbonize their portfolios.
So where are the opportunities for investment after the tipping point? Primarily they will exist where they existed before – the restrictions to investment into utility scale renewables are lifting. In the past, we used to estimate how much capacity of variable generation could be accommodated by a network before it became unstable. Grid stability is now enhanced by demand side response technologies and new system management techniques. Meanwhile new technologies, management techniques and responsive commercial arrangements are creating a whole new asset class while facilitating large flows of capital into further deployment of renewable energy.
Equally energy storage is rapidly reducing in cost opening up a whole new technology class with exciting prospects for investors. The market is working hard to catch up with the technology. It is still not clear what an investable project utilizing storage will look like. The simple answer would be to estimate returns based on the arbitrage between peak and trough prices, but then the rapid success of the asset class is likely to self-cannibalize the value proposition. Capacity contracts are promising but many institutional investors may prefer longer term clarity on income than currently offered. In any case, given the demand for investable solutions and the volumes of capital available for investing, it seems clear that the rapid development of the technology will likely be matched by the equally rapid development of the commercial structures for projects.
Fund Managers must work hard to remain at the fore of this market and continue to create business opportunities for investors. While the future for conventional renewable energy investment funds is more secure than ever, investors may also seek access to the new system-based opportunities and take their returns from a wide range of technologies and markets. In the world beyond the tipping point of interest in sustainable energy and energy systems, the exponential growth of investment into the new energy space is likely to continue unabated.
Glennmont Partners Consolidates Its Leading Presence in the Italian Onshore Wind Market
Date: July 21, 2017
Glennmont Partners, one of Europe’s largest clean energy investment specialists, has completed its acquisition of a 10 MW operating wind farm located in Central Italy. The acquisition takes Glennmont’s overall onshore wind portfolio to 550 MW and complements Glennmont’s strategy of building portfolios of renewable projects diversified by both geography and technology in order to provide predictable returns to investors. The wind farm is powered by five Gamesa G90 turbines and benefits from a 15 year feed in tariff, until 2027.
Francesco Cacciabue, Partner and Chief Financial Officer of Glennmont Partners, said: “This acquisition reinforces Glennmont’s track record of acquiring quality assets in Italy, a core market for us. We look forward to exploring further opportunities in the country.”
Claudio Vescovo, Investment Director of Glennmont Partners, said: “We are excited to close this transaction, which brings our Italian onshore wind portfolio to over 345 MW.”
Glennmont Partners holds 10th Clean Energy Seminar 2017 in Chantilly
Date: June 2, 2017
On May 15th and 16th 2017, in Chantilly, France, Glennmont Partners brought together key institutional investors and a range of renewable energy thought leaders to reflect, discuss and analyse the trends that are shaping our industry and promoting investment to the sector for its tenth annual seminar. The Glennmont team were joined by Former European Commissioner for Climate Change and Minister for the Environment of Denmark, Mrs Connie Hedegaard; CEO and President of leading technical advisor KiloWattSol, Mr Xavier Daval; Director of Financial Engineering at global sustainable power developer, Voltalia, Mr Olivier Cormarie; and Head of Power and Renewables at leading lending bank, Natixis, Mr Ranjan Moulik. All the presenters were in agreement that:
• Clean energy growth has passed an inflection point and is now accelerating. Carbon reduction is seen as good for business
• Solar still has very significant growth potential. New research that indicated that the world’s continents contain at least 3 times more solar power than is needed by the inhabiting populations
• Auction systems are now used globally to set Feed In Tariff prices. Investors and developers will need to work more closely together and form partnerships to win auctions
• Offshore wind is a maturing technology with global deployment set to triple within 2020. The sector has seen a maturing and consolidation of a solid value chain with financially sound counter-parties
Mrs Connie Hedegaard, Former European Commissioner for Climate Action and former Minister for the Environment and Climate Change, Denmark, addressed Glennmont’s guests.
Connie highlighted that clean energy growth has passed an inflection point and is now accelerating. Carbon reduction is seen as good for business and adopted by a wide spectrum of corporates. Irrespective of President Trump’s position on the Paris agreement – China has already said that it will continue the Treaty’s obligations. Carbon reduction is no longer only top down driven by politicians but by market forces as costs are reduced and the technology advances. Over the next years – electric vehicles will become the norm further reducing carbon emissions. Also, progress will be made on with energy efficiency and better European inter connections. Energy and carbon reduction are more and more co-ordinated on a European level which will help growth.
Xavier Daval – CEO of KiloWattSol – a leading technical adviser – spoke passionately about the growth of solar. Over a period of just ten 10 years solar demonstrated unprecedented growth: already 300GW has been installed, panel efficiency has increased by more than 30% and costs have down by 99%.
Solar still has very significant growth potential. New research that indicated that the world’s continents contain at least 3 times more solar power than is needed by the inhabiting populations on each continent. Smarter systems and advances in technology and further cost reductions will propel solar growth forward.
The distributed nature of solar, advances in smaller battery systems and ample availability of irradiation, position solar optimally for growth.
Olivier Cormarie – a director at Voltalia a leading global developer – gave an update on the latest development of Feed In Tariffs (“FIT”). Most countries now use an auction system to set FITs. This will ensure market pricing for new projects. Voltalia believes that under the auction system – investors and developers will need to work more closely together and form partnerships. These partnerships will raise a new set of questions about sharing of control and what happens when bids are not successful.
Ranjan Moulik – Natixis’ Managing Director, of Power and renewables gave a finance perspective on off shore wind.
Offshore wind is a maturing technology with global deployment set to triple within 2020. Cost reductions targets have been exceeded way ahead of schedule. It offers multiple comparative advantages such as 45% load factors which are significantly higher than onshore wind and solar PV. The development of the Offshore Wind Industry has enabled the maturing and consolidation of a solid value chain with financially sound counterparties.
The seminar concluded with a presentation from Enercon’s plant manager, Thibaut Labonde and a tour of Enercon’s Wind concrete tower Factory in Longueil Sainte Marie.
Thibaut’s presentation highlighted new technology already in use in wind turbine and tower manufacturing. Concrete towers can be taller than traditional steel towers. They can be more modular and are thus easier to transport to more challenging sites at lower cost.
Enercon uses a combination of steel and concrete component to build a next generation of towers which can go as high as 160 meters.
After the presentation, guests were permitted to tour the factory and witnessed in great detail the manufacturing process of various concrete towers and reinforcement materials used at each stage.
UK Clean Energy Investment Seminar – Current Trends in Infrastructure Investing
Date: April 27, 2017
On 26th April 2017, in London at the House of Commons, Glennmont Partners in conjunction with Alex Cunningham MP, the Shadow Pensions Minister, brought together key Government pensions policy makers, pension fund portfolio managers, and investment advisors, to discuss opportunities for Pension Funds to invest in the UK and in European energy industries.
The following key observations were noted:
• The success of the deployment of renewable energy over the past decade and a half has markedly reduced carbon emissions and reduced the wholesale cost of power
• Market responses to this offer new opportunities for investment, and facilitate further investment in renewable energy
• The transfer of assets from utilities to institutional investors will continue to allow strategic investors to focus on innovation, while Pensions Funds benefit from the long-term yield of the operating assets.
For more on our UK Clean Energy Investment Seminar, please click here.
Glennmont Off-Shore Wind Seminar – Sustainable Infra Investment Opportunity Set
Date: April 10, 2017
On the 30 March Glennmont brought together a group of the leading infrastructure investors from the Netherlands and surrounding countries to discuss the recent trends and developments in offshore wind investing. The message was clear from all parties that offshore wind is expanding and offering great opportunity for investment; that risks are becoming more recognised and quantifiable and the construction and operations companies are more able to manage the technical challenges of this huge sector.
The keynote presentation was made by Maria van der Hoeven, the former Environment Minister of the Netherlands and Executive Director of the International Energy Agency. Maria is currently senior associate fellow at Clingendael International Energy Program (CIEP). She gave a strong endorsement of the prospects for offshore wind power generation in the current climate, noting that the momentum achieved by the decarbonisation of the power generation sector makes it less prone to regulatory impact, especially given the reducing cost of production of power from renewable sources. She drew the attention of the delegates to the strong and continuing support for the sector from both individual European Governments as well as the European Union.
Maria was followed to the podium by Bart Heijermans, the CEO of DeepOcean Group, the specialist offshore engineering company who specialise in cable laying and connection infrastructure. Bart was able to bring the perspective of one who has spent a large part of his career in offshore engineering and pointed out that the repetitive nature of offshore wind power made it much less risky and more predictable as a construction project than offshore oil and gas construction. Bart commented that improved management, access and construction techniques have helped to lower the cost of production and look likely to continue to do so.
Finally we welcomed Max ter Linden, Managing Director of Mergers and Acquisitions at ABN AMRO who spoke about the strong appetite among lending banks to offer project finance for offshore wind projects with tenors up to 15 years. Max reported that the banks have been reassured by the higher levels of understanding of the risks associated with construction and operation offshore and by the greater capacity for managing them among the specialist construction and operations companies.
Glennmont Partners offer investors the opportunity to play a part in this rapidly maturing industry through their funds managed by their technically expert investment and asset management teams.
Sleaford Renewable Energy Plant welcomes Sleaford’s new MP
Date: March 21, 2017
Dr Caroline Johnson, the new MP for Sleaford & North Hykeham, visited the Sleaford Renewable Energy Plant on Friday, March 17th. The visit was an opportunity for Dr Johnson to see how the power station generates clean electricity for local homes and businesses and meet the teams who own and operate the power station.
During her visit, Dr Johnson was briefed about how straw (the main fuel for the plant) is procured, stored and delivered to the plant and was told about the wide-ranging support that the Sleaford Renewable Energy Plant has given to community organisations and projects since it entered operation in 2014. One of the main contributions has been the provision of free heat to the Sleaford swimming pool, the town’s football club and indoor bowls club, the William Alvey Primary School and the main office of North Kesteven District Council, and most recently financial support to upgrade broadband connectivity in Kirkby-la-Thorpe.
Peter Dickson, a director of Glennmont Partners, the owners of the Sleaford Renewable Energy Plant, hosted Dr Johnson with Matthew Igoe, the plant manager. Peter said: “We were delighted to welcome Caroline to the Sleaford plant and explain how it operates, how we work with the farming community and how we have supported the local area through the Sleaford Community Fund.”
Dr Caroline Johnson MP said: “It was my first visit to the Sleaford Renewable Energy Plant; it was fascinating to see how electricity is produced from straw that is mainly sourced from farms in the region. I was also impressed by the level of support that Glennmont Partners and the Sleaford plant have given to local community projects, large and small – in Sleaford and Kirkby-la-Thorpe. All told, it was a most interesting visit.”
Major renewables fund keen on Swedish wind turbines
Date: January 30, 2017
As published in
Until now, low electricity prices in the Nordics have kept Glennmont Partners from investing in the region. But price improvements now make Sweden an attractive market, according to the fund.
In Denmark, you still have to look hard to find a new onshore wind turbine, but in the neighboring country of Sweden, it is the opposite. A long line of projects are either under construction or headed in that direction in Sweden – not least because of favorable policies in the area and a Nordic electricity price which has started to rise after hovering at a record low.
This development has been noticed by London-based equity fund Glennmont Partners, which has otherwise invested in green projects solely in the UK and southern Europe thus far.
“We consider Sweden an exciting market, both as a place to raise capital and a place to invest in wind. The Swedish wind market offers interesting projects under a very stable regime. Of course, the prices in Nordpool have made life difficult for Swedish projects in recent years, and if the prices had not been so low, we probably would have already entered the Swedish market. But now we see improvement and I would deem it very likely that within a not-far-off future, we will invest in our first projects in Sweden,” says Peter Dickson, founding partner and technical director of Glennmont Partners.
As such, Glennmont is on the same path as Danish pension fund Sampension, which invested in several onshore wind farms in Sweden and Germany last October in a DKK 1.4 billion investment (EUR 188 million), justified on the basis of a stable regime and attractive framework conditions.
Sweden’s good conditions – in part in Finland and Norway as well – were also reflected last year in several wind turbine orders. Not least Denmark’s Vestas was successful with orders in Sweden, Norway, and Finland totaling more than 1.5 GW.
Peter Dickson is not surprised that onshore turbines are doing well.
“We’re very close to seeing onshore turbines which are now competitive without support. It’s only a matter of time. We will soon see this here in the UK, but we also eye exciting opportunities in, for example, Norway and Sweden. The competition here is good, there are many exciting projects, and these are very stable and predictable regimes,” says Dickson.
Glennmont Partners is working on launching a third fund in the foreseeable future. As to how big the fund will be, the company is not yet ready to talk about.
You can read the full article here: Energy Watch EU
Equity fund: Green has become a guarantee – not a risk
As published in
Peter Dickson is interviewed by SØREN SPRINGBORG for Energy Watch EU
INTERVIEW: Just a few years ago, capital fund Glennmont Partners was sold on the idea that investments in sustainable energy were a safe bet. Today, investors are lining up, while conventional energy is seen as a direct road to losses
The view of London’s financial district from Glennmont Partners’ meeting room on the 12th floor does not disappoint. Meanwhile, the light, elegant furniture, the polished conference table, and the freshly-brewed cappuccino brought in by the assistant could just as easily make up the interiors at Goldman Sachs, HSBC, or Deutsche Bank.
Although, on the surface, Glennmont Partners is visibly an equity fund, there is still something different about this fund. At Glennmont Partners, which originally emerged from French major bank BNP Paribas but today is completely independent, the focus is to invest exclusively within renewable energy. Furthermore, the fund invests as an active development partner. That means that besides a team of financial experts, there is also a large team of technical experts employed to assess and manage the projects, in which the fund has invested approximately EUR 1 billion.
The fund has overwhelmingly invested in the UK and Southern Europe, while the largest investment areas have been solar power and wind turbines, combined with a little biomass in the UK. It is a geographically and technically-narrow investment profile. But one which has been closely followed, says Peter Dickson, founding partner and technical director of Glennmont Partners.
“Our investors expect that we are conservative. Until now, the technologies that have managed to get on the list have been onshore wind, solar energy, fuel plants based on biomass, and small hydro plants. These technologies are relatively cheap, and they have been in operation for a long time, there is a history, you can get reasonable guarantees, and there is a service unit in place. The conservative approach also applies geographically. Therefore our focus is West Europe, where we see stable regimes both politically and economically and where we have had feed-in tariffs for sustainable energy with a long-term horizon,” says Peter Dickson.
A safe bet
The fund’s customers are primarily institutional investors – largely pension funds. Since the fund was launched in 2008/2009, it has been with the sales argument that green energy was a stable investment in a world which was financially squeezed. “What we offered at the time was the opportunity to invest in a fund with a low risk and stable and competitive returns based on renewable energy. It must be remembered that at that point in time, above all others, renewable energy seemed to be the safest bet with guarantees of reasonable returns. Our strength was and is, that we are based on the fundamental need for security of supply,” says Dickson, highlighting that the world has changed much since – also within energy investments. “Renewable energy is about to make itself independent of regulation. The cost of renewable energy has declined noticeably while the industrial maturation of the technology has resulted in such a large capacity that it now seems like a one-way road is paved for sustainable energy. Among investors, there is much greater concern over the risk of stranded assets within conventional energy than there is a concern surrounding the risks of renewable energy.”
Over the last few years we have seen huge price declines on renewable energy. As an investor, how do you explain the trend and its sudden and rapid development?
“Solar is probably the best example. We are talking price declines of up to 85 percent over the past nine years. The reason the price has fallen so extremely is that huge sums have flowed to the industry in the form of investments, because the projects have been protected against price fluctuations thanks to feed-in tariffs. It is a little ironic, that the original subsidies which should have attracted investors and which have been costly for society as a whole, ultimately ended up maturing the technology and pressuring the price down on new projects, so that today we get entirely different, low prices which can compete without the help of subsidies. We see the same thing in offshore wind with the latest bids in both Denmark and the Netherlands. It could well be that customers feel that in a number of offshore projects that have been built in Northern Europe over the last 10–20 years, they have had to pay a very high price. However, thanks to these projects and the support given at the time, we now see offshore projects such as Borssele at prices which are far lower than would have been imagined just one or two years ago.”
As an investor and a project developer, are your demands for returns the same, although the price for energy is changing? What can you change, when you take on projects in an environment where the price on energy is declining?
“Firstly, all project proposals go through a thorough assessment covering financial risks, technical specifications, legal issues, and which takes into account how the project fits into the rest of our portfolio. We also use considerable time on dialogue with our suppliers. In our wind portfolio, we primarily have Nordex turbines, but we also have Gamesa, Enercon, and Siemens. It is critical for us to understand the strategic approach, which the individual wind turbine manufacturer has for the countries, we wish to invest in. We are not much for buying equipment from a manufacturer which does not already have a critical mass in the country, we are investing in. We must be sure that there is free access to necessary spare parts and that there is a kind of maintenance organization in place. That means that we are close to the management in the companies, which have technology that we use. This is important, because it strives to be a long-term relationship. At the same time, all of our projects, except one, have service agreements in place with original suppliers. We are looking closely at all opportunities to reduce costs without compromising on quality and predictability.”
2016 was a turbulent year, to put it mildly. Trump was elected in the US and the UK voted to exit the EU. Both have the potential to create huge consequences for energy policy. As an investment fund, can you hedge against these kinds of events?
“It is very difficult to take these kinds of macro events 100 percent into account. However our strategy is to bet on diversification – that is why we have invested in five different countries across four different technologies. We have clear barriers for how much we can invest in one technology or one country. We aim to select the countries where the regime is most stable and that means we end up in Western Europe.”
One of the countries is the UK – do you still consider the UK regime stable, even after Brexit?”
The climate and energy field is largely unaffected by Brexit. We still have the same subsidy schemes in place, we still talk about CO2 reduction targets of 40 percent by 2030. Meanwhile, the UK government has worked very diligently to confirm to the market that it will still welcome investment in the country’s energy sector. Obviously, in the wake of the referendum, we as a fund took a step back and considered how to position ourselves. But what has happened since has given us great confidence that the UK will seek the best possible conditions for the country’s renewable energy ambitions.”
You can read the full article here: Energy Watch EU
London’s investment banks are hungry for offshore wind
Date: January 25, 2017
As published in
For several years, offshore wind has held a poor reputation in financial circles for being a risky and expensive venture which should only be taken on by major energy companies. But technology is now so mature and prices have declined so much that the atmosphere has changed, says one of Europe’s largest green funds.
While energy companies such as Dong and Vattenfall have invested massively in offshore wind for many years, the enthusiasm among European equity funds and investment banks has been more modest. The offshore appetite among pension funds has existed for several years, but particularly in recent years this trend has been lead by Danish pension funds. And now, investment banks and other equity funds are joining in.
A study by WindEurope from the summer of 2016 shows that institutional investors were behind the financing of 25.1 percent of the offshore wind capacity erected in the first half of 2016 in the EU. In comparison, this number was just 13.5 percent for the first half of 2015.
The numbers for the full-year 2016 are not yet accessible, but according to one of Europe’s most experienced green equity funds, this number will not shrink going forward.
Equity fund Glennmont Partners, which administers two funds of a total EUR 1 billion in renewable energy, which for the first time acknowledges offshore wind as a technology at the maturity level where the fund is willing to invest in future projects. Thus far, Glennmont Partners has consistently opted to invest only in solar power, onshore turbines, and biomass based on compost. Small hydro facilities are also on the fund’s list of approved technologies, but not something the company has actually invested in.
“Offshore wind is now on the list of technologies that we invest in. So when we enter the market with our next fund in a foreseeable future, there is also a chance that we will invest there. We have previously been skeptical towards offshore wind, and we considered the technology too immature with overly high technological risks and too many bottle necks for our profile. The newest generations of offshore wind farms have shown, however, that the technology has come a long way, and we believe the contracts that form the foundation for the farms are so thoroughly tested now, that we want to join in,” says Peter Dickson, founding partner and technical director of Glennmont Partners.
More professional offshore wind
Glennmont Partners is behind two funds of EUR 437 million and EUR 500 million, respectively. Both funds exclusively invest in projects in renewable energy, and they do so on behalf of institutional investors. The funds have overwhelmingly invested in the UK and southern Europe. The largest investment areas have been solar power and onshore wind, combined with some biomass in the UK.
“A technology like offshore has not thus far level been at a level where we considered it an attractive investment for a fund like ours. The previous offshore projects have naturally been led by large energy companies, which have other opportunities to take on the risks that these projects entail. And take on the projects alone. But now, the market is different and we are seeing everywhere that new offshore farms need to attract financial partners. This places new requirements on the deals behind the farms, and as an investor, we have very strict requirements for risk distribution and guarantees. This helps increase the professionalism behind the projects and it benefits all parties, as I see it,” says Dickson.
Different capital requirements
The investments in offshore wind turbines require a very different level of capital, however, than that required by onshore turbines and solar panel farms. For this reason, the trend has mainly been for energy companies such as Dong to take on the preparation work and begin construction of the offshore wind farms, and then divest stakes to parties such as pension funds.
Glennmont Partners is also potentially interested in this type of model, but in order to get in the game it needs to evaluate the size of the future fund.
“We will have to examine how to financially structure a new fund. Offshore projects are more expensive than onshore, for example, so it would take a different kind of strength. Therefore, it would be a type of consortium, where apart from economic funds we can offer technical knowledge and a risk management team with vast experience. Furthermore, we have extensive in-house engineering expertise in how to manage large and complex construction projects. So I see us taking a leadership role in this kind of consortium,” says Dickson.
You can read the full article here: Energy Watch EU
The future of clean energy in the new Europe
Date: November 17, 2016
While in political terms 2016 is most likely to be remembered for President-elect Donald Trump and for Brexit, maybe we should pinch ourselves and remember how this year also saw international Governments come together to establish a consensus in favour of ever more ambitious climate change mitigation targets. Many would agree this is the most significant political issue of the year. The signing of the COP21 agreement in November 2015 has been followed by an extremely fast ratification, so that the agreement came into force on the 5th of October this year. For this we must partly thank Mr Trump, without whose candidacy for President of the United States a more relaxed approach may have been adopted by Governments.
Today Glennmont Partners brought together some of the leading opinion formers from the UK clean energy industry, from Government and from the world of environmental economics to mark the shift in thinking on energy policy and investment trends that has occurred. Lord Deben, the Chair of the UK Government’s Committee on Climate Change, Ivor Catto, CEO of leading global renewable energy developer, RES, and Tom Burke, past advisor to several UK Secretaries of State and Chairman of independent think tank, E3G all spoke at Glennmont’s event in the House of Lords. From three diverging backgrounds the message was the same: that there is a momentum behind the decarbonisation of the power sector globally that will not easily be headed off by unilateral actions by climate sceptic Governments; that the economics of renewable power are creating a ‘pull’ factor on regulation, in a reversal of the conventional paradigm of policy being used to create a commercial case for renewables; and that for energy sector investors the choice is no longer difficult – there is more risk inherent in sticking with old conventional plant than there is in supporting the clean energy revolution.
In his speech, Lord Deben drove home the point that whatever policies are under debate in the UK Parliament, decarbonisation is beyond discussion due to the terms of the Climate Change Act of 2008 which establishes a framework to develop an economically credible emissions reduction path. He emphasised the significance of the Paris Accord, drawn up at COP21 last year, which constituted a hugely significant indication of a global direction of travel.
For us to rise to the challenge set out by COP21, innovation is essential. Ivor Catto spoke about how this is indeed under way through the UK’s private sector companies. He considers that the challenges set by climate change mitigation are well understood and create many opportunities for investors to put their funds to work for the good of the planet. Ivor showed that the development of demand-side technologies had the potential to create very significant new opportunities for generation, and that the decarbonisation of the transport sector would give rise to a whole new requirement for carbon-free power generation to fuel the fleet of electric cars.
We ended our roundtable on an optimistic note for the sector. Tom Burke, the well-respected economist and commentator in the world of climate change mitigation, reiterated the point that there is a momentum in the clean energy sector and in decarbonisation in general that will be hard to stop. He pointed out that now Paris is in force there is little that any individual can do to undermine it. The biggest risk in commercial and environmental terms is not investing in low-carbon power generation.
The aligned message from all the speakers was that the momentum of industrial activity and the precipitous drop in the price of power produced from renewable sources signifies a fundamental reversal in the situation from a few years ago. Whereas policy was once used to drive the economics of power generation, it is now low carbon power which directs activity and potentially policy.
Glennmont secures financing of its 60 MW wind farm in Italy
Date: November 10, 2016
Glennmont closes the financing of one of the largest single wind farms in Italy, acquired prior to construction and delivered to the operational phase
Glennmont Partners, one of the largest infrastructure investment managers dedicated to European clean energy, has completed the financing of one of the largest single wind farms in Italy.
The 60MW wind farm was purchased by Glennmont when all construction permits were secured and the 20 year Feed-in Tariff was awarded under the auction system run by the Italian Authority (Gestore Servizi Energetici – GSE). Glennmont then structured the procurement and construction contracts, and managed the construction of the plant which was delivered on budget and within the set time-frame.
The wind farm is located in the Basilicata region, in an area of strong wind resource, and benefits from a 20-year tariff, granting a pre-set and fix value per MW generated over the period. The site consists of 20 Siemens wind turbines with 3 MW of capacity each.
Glennmont has closed a 17 year non-recourse project financing with a pool of top tier lenders including ING, Siemens Bank and Unicredit which have provided in excess of €85m.
The investment is aligned with Glennmont’s strategy of building a significant portfolio of renewable projects which are diversified across proven technologies in the most attractive European markets with a view to delivering stable and predictable returns to investors. This wind farm further bolsters Glennmont’s Italian wind portfolio which comprises a 245MW portfolio recently purchased from Iberdrola and an additional 30MW operational plant. Glennmont now manages in excess of 600MW of onshore wind capacity in France, Ireland, Italy and the UK as well as a further 300MW of biomass and solar.
Francesco Cacciabue, a Partner at Glennmont, said: “The commitment of €85m to our project builds on our track record of securing financing from top tier institutions and reinforces our ability to select opportunities, execute investments and manage large construction sites in order to deliver high quality assets to our investors”.
Gruig Wind Farm distributes annual wind fall for local community groups
Date: August 3, 2016
Gruig Wind Farm, located near Corkey, Co Antrim has just provided an annual financial contribution towards three local community groups. The wind farm managed by local renewable energy company, RES, on behalf of wind farm owners Glennmont Partners, supports three local groups: Cloughmills Community Action Team, St Anne’s Support Group (Corkey) and the Loughgiel Community Association.
Since commencing operations in 2010, the wind farm has provided over £74,000 to the local community. The fund has provided a number of activities and services within the local area, including contributing towards the Old Mill community allotment project in Cloughmills. The facility provides a safe and friendly environment for members of the local community to come together and enjoy a passion for garden and all things horticultural. From growing and preparing plants for hanging baskets, to raising hens, the allotments have grown from strength to strength in recent years.
St Anne’s Support Group uses their proportion of the Fund to provide additional support to St Anne’s Primary School, Corkey. The Fund has provided additional teaching resources and assisted in extracurricular activities throughout the year, such as school trips.
Loughgiel Development Association continues to use their Gruig Wind Farm financial contribution towards ongoing running costs within the Millennium Centre and maintaining the valuable services which it has been providing the community in recent times, such as the playgroup service that enables parents to return to work.
Angela O’Hagan, Centre Manager, The Millennium Centre stated, “The funding that we receive from Gruig Wind Farm is a great lifeline to us. It allows us to maintain the services for the community that we have established over the years. As there are no restrictions on how it can be used, we are also able to use some of the money to cover insurance and running costs that we just wouldn’t be able to get funding for anywhere else”.
Gruig Wind Farm, Community Relations Manager, Victoria Graham continues, “It is great to see and hear first-hand the difference that the Community Benefit Fund is making to local groups. We have close links with the local villages and hope to continue building on relationships over the coming years through RES’ continued management and operations of Gruig Wind Farm.
Glennmont acquires 245 MW Wind Farm Portfolio in Italy
Date: July 4, 2016
Glennmont closes the acquisition of one of the largest wind portfolios in Italy
Glennmont Partners, one of the largest infrastructure investment managers dedicated to European clean energy, has completed the purchase of one of the most sizeable operational portfolios of wind farms in Italy. The investment totals 245MW across five sites located in Puglia and Sicily – two of highest wind resource areas of Italy. The wind farms are held by Societa’ Energie Rinnovabili (“SER”) and Societa’ Energie Rinnovabili 1 (“SER 1”) (together called the “SER portfolio”) and were purchased from Iberdrola, the Spanish listed utility.
The five sites have on average a five year operational history and are project financed by a club of Italian and international banks. The SER portfolio benefits from the Italian Feed-In Premium ten further years creating a hedge versus electricity price volatility.
Glennmont Partners have acquired the portfolio including a skilled in-house team of circa twenty employees managing the portfolio and providing technical, commercial, administrative and financial services to the wind farms. All existing lending banks have already consented to Glennmont becoming the new owner.
The investment fits Glennmont’s strategy of building a significant portfolio of renewable projects that is diversified across proven technologies in the most attractive European markets with a view to deliver stable and predictable returns to investors. Glennmont already owned approximately 80MW of wind generation capacity in Italy. Glennmont now manages in excess of 500MW of onshore wind capacity in France, Ireland, Italy and the UK as well as a further 300MW of biomass and solar.
Francesco Cacciabue, Partner of Glennmont, said: “The SER portfolio is a high quality wind farm portfolio of very significant size with a proven track record. This investment validates our strategy of building scale in a market on the back of steady asset cash flows with potential to unlock and add value over time by active asset management”.
Italy provides 9 billion Euros for clean energy
Date: July 1, 2016
When one’s home country is immersed in an intense political process that dominates the press sometimes it is hard to see the wider picture to note that business carries on as usual. In the instance of European renewable energy deployment, the Renewable Energy Directive continues to drive investment and national regulation. Last week the Government of Italy approved a decree aimed at providing support for the renewable energy sector for the next 20 years. The Italian Government has stated that the framework is aimed at encouraging the replacement of conventional power in the country’s energy mix.
Italy has already surpassed its 2020 target of 17% energy to be sourced from renewable sources, and yet has announced a funding programme for the next 20 years.The programme will support technologies where Glennmont is specialist, onshore wind and biomass as well as solar thermal power projects.
Glennmont has maintained close links to the Italian energy ministry and over the past 4 years has developed a portfolio of wind and solar power in Italy, including the recent purchase of the 245MW wind portfolio from Spanish utility, Iberdrola. The decree shows that confidence in the Italian renewable energy market is well placed and that our established position there will likely give rise to further opportunities in the future.
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