MONTHLY REVIEW FEBRUARY

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1 MONTHLY REVIEW FEBRUARY

2 MONTHLY REVIEW - FEBRUARY 2018 Clean Energy Pipeline s Monthly Review provides a selection of exclusive interviews and features that were published on during the month. Bespoke graphs and analytics based on deals tracked by our in-house data team at the end of the publication are available for citation. KEY CONTACTS Subscription Ben Oakshott Sonja van Linden Tol Editorial Andrew Nguyen Jack Pike Data Thai Tran Chenwu Qian Research Thomas Sturge Jamie Rossouw Production Lex Guerra Media Partnership Matthew Jakubiec Centaur Media PLC (0) All rights reserved. No parts of this publication may be reproduced, in English or other languages, stored in a retrieval system or transmitted, in any form or by any means, without prior permission of the publishers. This includes hosting all or part of this publication online. For subscription enquiries, please contact Sonja van Linden Tol on +44 (0) or sonja.vanlindentol@ cleanenergypipeline.com. 3 JLEN in Talks with Investors, Sets Bar at 200m Chris Tanner, John Laing Capital Management, Director 4 BNP Paribas Ramps up Clean Energy Commitment Mark Muldowney, BNP Paribas, Managing Director (Energy & Infrastructure) 5 Santander Extremely Interested in Talking to Developers Howard Whitehead, Santander Corporate & Commercial, Head of Infrastructure & Renewable Energy 6 Inspired Evolution Seeks Investors for Evolution II Fund Wayne Keast, Inspired Evolution Investment Management, Managing Partner 8 EFG Hermes Private Equity s Head of Energy Explains Bank s Investment Strategy Bakr Abdel-Wahab, EFG Hermes Private Equity, Head of Energy 9 FIM Looking to Raise 50m in 2018 Wayne Cranstone, FIM Services, Chief Operating Officer 10 BBVA Awaits EU Verdict on Green Bonds Julián Romero, BBVA, Head of Sustainable Bonds 11 New BSR Director Talks O&M in the UK Matthew Harnack, British Solar Renewables, Operations and Management Director 12 Chinese Investors Very Keen on European Clean Energy and Tech Yin Yang, Partner Capital, Partner 14 Triodos Bank to Grow Lending Activities Philip Bazin, Triodos Bank, Environment Team Leader 15 CEE Group Plans New Fundraising, in Midst of Solar PV, Wind Investment Strategy Jens Schnoor, CEE Group, Investment Director 16 TRIG Sets Sights on New Offshore Wind Deals Richard Crawford, The Renewables Infrastructure Group, Investment Manager Jaz Bains, The Renewables Infrastructure Group, Operations Manager 18 Quercus CEO Talks up Next 100m Fundraise & Timetable for 600 MW Iranian Solar Diego Biasi, Quercus Asset Selection, CEO and Co-Founder 19 Clean Energy Graphs & Analytics Green Bond Venture Capital & Private Equity M&A Project Finance

3 JLEN IN TALKS WITH INVESTORS, SETS BAR AT 200M Timetable for the 30 million raise JLEN s share issuance programme isn t linked to any particular clean energy infrastructure sector, but Tanner said it wouldn t be a surprise at all if the money found itself into UK AD and biomass assets, especially given the fact that it s two most recent investments were in the sector and that AD has a large proportion of its revenues coming through subsidy mechanisms that have inflation-linkage and level of price certainty. London-listed infrastructure fund John Laing Environmental Assets Group Ltd. (JLEN) has set the bar at 200 million for its share issuance programme. Chris Tanner, Director at John Laing Capital Management Ltd., told Clean Energy Pipeline that the YieldCo was currently in talks with investors for the first 30 million initial placing. What we re putting in place is a share issuance programme and that will be in place for 12 months, Tanner told CEP. JLEN will first seek 30 million from an initial placing of its shares. We are out talking to investors and seeking commitments now, the [initial] placing will close on 6th of March, the results of the placing will happen on the 7th of March, and new shares will be admitted on the 9th of March, Tanner explaind. I think investors are receptive to the stories we are telling. We are an environmental infrastructure fund, we have broad mandate across a number of technologies, and what we are really seeking is diversification. It s really to provide us with an efficient and cost effective means of raising capital, in line with the needs of the funds and the opportunities that we see. [We invest in] long-term assets, they have some revenue streams which are explicitly linked to an inflation measure, typically RPI, and these are things that investors are finding attractive. We can see there is investor appetite for the sector as a whole, and all of the funds within the listed renewables infrastructure space have been successful with raising money in the last few years. However, unlike many other listed infrastructure funds, JLEN has a broader mandate to invest across several clean energy technologies. Our mandate is to invest into environmental infrastructure, that includes wind and solar like a number of the other funds, but we are able to go into AD, waste technologies, wastewater technologies, biomass and beyond that into energy efficiency, Tanner added. We do see that broad mandate as a positive thing, it enables us to diversify the sources of our revenue, and we have a wider universe of opportunities to look at and that s quite an important thing in competitive markets. Talks ongoing Tanner said that conversations for the initial placing was ongoing and taking place with various institutional investors, larger wealth managers, and private client brokers. Despite JLEN s ceiling of 200 million to be raised over the next 12 months, Tanner explained that the London-listed infrastructure fund wouldn t go out of its way to hit the figure. The maximum we have set for the issuance is 200 million, but we will use it sensibly to the extent that we ll need it, Tanner added. If we can see opportunities to put investors money to work usefully than we will approach investors, but we re not necessarily looking to raise all of it for the sake of having it. Monthly Review - February 2018 page 3

4 BNP PARIBAS RAMPS UP CLEAN ENERGY COMMITMENT French banking giant BNP Paribas has more capital to invest into the renewable energy sector than ever before. Having officially halted fossil fuel-type investments last year, it seems BNP Paribas is more committed than ever to invest in decarbonisation. Mark Muldowney, Managing Director, Energy & Infrastructure, BNP Paribas, told Clean Energy Pipeline that BNP Paribas is upping the ante to accelerate its financial commitments in the green economy. We are putting a lot more capital into this area and have set ourselves a target of increasing our exposure to the energy transition from about 6.9 billion at the end of 2015 to 15 billion by 2020, he told publication. It s a very important part of our activities and we are active across a wide range of renewable energy projects. Renewables to receive bulk of BNP s auspices given for demand side of the energy market too. For example, we did a smart metre deal last year to help support the infrastructure that will allow consumers to make better decisions that will provide energy intensive equipment, explained Muldowney. It is generally harder to find those lending opportunities but that is also an important part of the transition. With 15 billion to be deployed in the next few years, BNP Paribas has opted for a diversified clean energy investment strategy. For example, included in the commitment will be 100 million set aside for start-ups specialising in energy storage and energy efficiency. We are extremely active in offshore wind, also in onshore wind and solar, but we look at the whole range of renewable energy technologies, said the Managing Director. Our ambition is to be heavily involved across this sector and we are devoting a lot of energy and resource to it. Muldowney said the bank s wider policy of corporate, social engagement would play an important role in financing the huge amount of capital required for the whole energy transition. Muldowney added that its 15 billion commitment would mostly be deployed for renewable generation, but also for support would also be Early on the scene BNP Paribas was an early financier in clean energy and is now reaping the benefits of an ever-maturing market. Muldowney said: I think we are getting to the stage where all banks have understood that they need to be active players in the sector. We saw a long time ago that this was going to become very important and we sought to educate ourselves and be involved in these projects when they were quite unusual. There is a role for more banks to understand the importance of the market and start to grapple with the sometimes-difficult credit issues required by the sector. We are also seeing a few non-bank lenders coming into the sector or debt funds that have been set up to look at infrastructure that have started to look seriously at supporting big renewable projects. page 4

5 SANTANDER EXTREMELY INTERESTED IN TALKING TO DEVELOPERS Santander s Corporate and Commercial bank is well-placed to deliver a diversified project finance solutions to the renewable energy sector that will include backing for energy storage. Howard Whitehead, Head of Infrastructure & Renewable Energy at Santander Corporate & Commercial, told Clean Energy Pipeline that it is keen on finding new opportunities in the energy storage sector, as well continuing to back more established wind and solar technologies. We are extremely interested in talking to any developer who has either got a consented project or is seeking a refinancing of an existing project. this year. Our core technology was wind, ground-mounted solar and hydro Recently, we have looked to diversify our offering, said Whitehead. That s where battery storage has come in and we are very happy to have delivered on the BESS transaction which was groundbreaking in project finance, given the nature of the revenue contracts and that it is not a typical onshore wind or ground-mounted solar farm where you have a 20-year RO for example. This is our first battery storage deal and certainly this technology is a key part of our strategy going forward. We are [also] very interested and very happy to talk to anyone who has been successful in the T1 and T4 capacity market auctions, or the upcoming FFR (Firm frequency response). Both the capacity market and FFR are demand side response schemes led by the National Grid that serve to manage the grid when demand is at risk of exceeding supply. Whitehead joined Santander s Corporate and Commercial bank in 2004 on the basis of helping to set up a renewable energy team specifically focused on providing project finance to SMEs that traditionally struggled finding lenders for their projects. It is slightly more challenging to put a project finance solution around a battery storage revenue stack but we successfully provided a solution that delivered on the customer s requirements but also our lending mandate. Role of banks in decarbonisation The shift to a low carbon economy cannot be brought about without financing both proven renewable technologies in utility-scale projects and sectors such as battery storage, which has yet to truly hit the ground running with investors, despite burgeoning support for lithium-ion. The new division aligned itself with colleagues in the Global Bank, which provided project finance solutions for Santander s global clients, therefore resulting in a full market offering being provided by Santander UK. Investment strategy Certainly, within the UK there is a strong will for that to continue in terms of our offering [investments in renewables], Whitehead told Clean Energy Pipeline. Accessing debt is fundamentally for project finance and I don t see that changing. The minimum Whitehead s team would lend on a project finance basis would be 3 million and the maximum is 30 million. The alternate choices are either to fund your projects entirely by own resources/equity or raise mezzanine finance. In January, London-based Battery Energy Storage Solutions Ltd. (BESS) secured 28.5 million project finance from Santander Corporate & Commercial for the 100 MW rollout of storage assets Typically, the most efficient use of capital is to raise short to medium-term project finance debt, which is where Santander is in the market. Monthly Review - February 2018 page 5

6 INSPIRED EVOLUTION SEEKS INVESTORS FOR EVOLUTION II FUND Private equity investment fund Inspired Evolution Investment Management is seeking investors for the final close of its $250 million Evolution II Fund. Evolution II is a full sub-saharan Africa fund with a mandate for equity and equity-related investments. The fund develops and provides project finance investments in clean and sustainable energy as well as growth equity investments in energy and resource efficiency companies. Inspired Evolution is targeting a hard cap of $250 million for the Evolution II fund following its first $90 million fundraising round in December Wayne Keast, Managing Partner at Inspired Evolution Investment Management, told Clean Energy Pipeline that he is confident the fund will attract investors, even if it takes longer than originally anticipated. Renewable energy within emerging markets is not everyone s cup of tea, [but] we would believe that we can get to the $250 million, Keast told the publication. We have final close targeted for the end of March and we are going to ask for a six-month extension to the end of September. Keast also told Clean Energy Pipeline that the African Development Bank and another European DFI, the identity of which he could not reveal, have final board approval to commit $20 million and $15 million, respectively into the Evolution II fund. An announcement regarding closure of the transactions is expected soon. The sub-sahara African market To date, Inspired Evolution has funded 918 MW of operational renewable projects in sub-saharan Africa and is fundraising for Evolution II to expand its capacity in the region. The Cape Town-based firm first entered the market in 2008 through Evolution II s predecessor fund, the $94 million Evolution I. Both funds invest within Inspired Evolution s 11 tier one countries in sub-saharan Africa including South Africa and the Commonwealth area, Botswana, Mozambique, Zambia, Tanzania, Kenya, Ethiopia, Ghana and Nigeria. Keast calls Inspired Evolution the first dedicated clean energy private equity fund in Africa. Sub-Saharan Africa is an emerging market with a predilection for solar power. More than half of the $3.5 billion project finance deals page 6

7 recorded by Clean Energy Pipeline s data team in 2017 were for solar photovoltaic (PV) assets. Inspired Evolution previous investments in the region follow this trend as demonstrated by the $36 commitment announced this month into Alten RE Developments, the Africa-focused subsidiary of developer Alten Energias Renovables. expecting to exit all in the next six to 12 months. Moving forward, Inspired Evolution seems well-placed to deploy new capital raised in its Evolution II fund. Keast told Clean Energy Pipeline that the specialist investment manager is currently finalising the details of its next deals. The investment was made to help scale Alten Africa s existing solar photovoltaic (PV) development platform where it holds construction-ready and advanced projects in Namibia, Kenya and Nigeria with a combined capacity of 225 MW. Diversified portfolio We are looking at a geothermal [project] in Kenya, a solar [project] in Burundi and a West African off-grid energy [project], said the Managing Partner. The latter would supply energy to large industries that operate off-grid and reduce the dependency of coal and heavy fuel oils. However, Inspired Evolution is not restricting itself to just the solar market, having operated assets in solar, wind, hydro and waste management through its Evolution I fund. We will operate across the full range of cleaner energy but mostly we ll be looking at solar, wind and small hydro, explained the Managing Partner. On our Evolution I fund we ve got 28% growth and 16% net return. We have had 14 exits and we have three remaining assets. We are Monthly Review - February 2018 page 7

8 EFG HERMES PRIVATE EQUITY S HEAD OF ENERGY EXPLAINS BANK S INVESTMENT STRATEGY advantage of not being tied to a specified fund strategy, allowing the investment bank to cast it s on eye on several markets, depending of course on investor interest. We marry the right investor with the right deal, so that differs from many other who could somehow be confined by their original fund mandate, said Abdel-Wahab. Clean Energy Pipeline caught up with Bakr Abdel-Wahab, Head of Energy at EFG Hermes Private Equity, to discuss the investment bank s clean energy plans for the year, business strategy, new markets to have caught its eye, and its UK solar holdings. Since joining EFG Hermes in 2010, Abdel-Wahab has helped spearhead some of the investment bank s biggest clean energy deals and essentially helped to grow its assets under management to well over 1 billion. A few years back we started a platform called Vortex Energy and over three large-scale transactions we have a net ownership of 822 MW, Abdel-Wahab told Clean Energy Pipeline. Vortex Energy s clean energy portfolio is split between solar PV and onshore wind projects. The UK is where Vortex s solar portfolio is exclusively located and that totals 365 MW of generating capacity, while it s 457 MW of onshore wind assets are spread on the continent between Spain, Portugal, Belgium and France. On a deal by deal basis, we act as investment manager, we raise equity from our group of investors, we also raise debt as required, to make acquisitions and investments, Abdel-Wahab said of the EFG Hermes strategy. Typically out of the equity for any deal that we do, EFG Hermes, our sponsor, seeds up to 5% of the amount - the remaining 95% is funded by institutional and strategic investors. [For example] some European funds are only allowed to do OECD and they can t look at emerging markets, [and therefore] we have more flexibility to tailor and evolve our strategy to suit the overall sector and macroeconomic trends - this allows us to be more independent and agile. In terms of 2018 s activities, Abdel-Wahab told Clean Energy Pipeline that the investment bank was looking at refinancing deals, as well as one or two new deals; though he couldn t reveal whether they would reach financial close during the year. New markets on the horizon He continued: We re still looking at Spain, Italy and France as well, We re also looking at some emerging markets in parallel, potentially Latin America and some Middle East and North Africa selectively. What s becoming interesting is the price of renewable energy is falling down to compete with conventional energy, and that makes it more sustainable in our view. It s not heavily subsidised and hence is exerting less pressure on the governments balance sheet. And because the technology prices is falling down as well, we are seeing this trickle through to the tariffs that are offered, while still maintaining sustainble risk adjusted returns for investors and sponsors. For the UK, Abdel-Wahab said that EFG Hermes was unlikely to do any large-scale portfolio acquisitions but rather some smaller bolt-on acquisitions for its investor base, with the focus now on accruing returns after such an expensive deal. Flexible investment strategy Abdel-Wahab told the publication that EFG Hermes had the added Abdel-Wahab concluded: I think any new transaction that we do would probably get us to the 1 GW mark. page 8

9 FIM LOOKING TO RAISE 50M IN 2018 In the wake of FIM Services Ltd. s new solar fund s successful capital raise, Wayne Cranstone, chief operating officer at the UKbased asset manager, revealed to Clean Energy Pipeline that it will further boost its coffers in Investors interest high FIM works on behalf of unlisted funds, high net worth individuals, family offices and institutions investing in clean energy UK assets. FIM collected roughly 16 million from investors at the close of last year and used the proceeds to acquire in early January both the 5 MW East Appleton and the 5 MW Stripe solar parks. The assets became operational in March 2016 and are situated in North Yorkshire. According to Cranstone, these financiers like the long-term income streams delivered by the proven asset class. Yeah there is actually [strong investor interest] because of the characteristics of the investment, long-term stable revenues that you get from both wind and solar, he said. We have a bit of cash leftover which we are seeking another asset to buy but will also be fundraising again into that vehicle probably about summer this year, Cranstone told the publication. I d be looking at 20 million to 25 million and then if we raise that in the summer we d be looking to deploy that before the end of [Some] 50% of the income roughly is from rocks, so obviously you have protection from inflation as they are linked to RPI and in our funds we get inheritance tax release as well so that s really what our retail investors like. Buyer s market Hopefully we ll raise more than we did last time, that tends to be how it works as the funds get bigger and [as they] gain a bit of momentum. Once FIM completes the 2018 capital raise from both its onshore wind and ground-mounted solar funds, the firm will mobilise approximately 50 million finance to bolster its portfolio. Expanding onshore wind portfolio Since its beginnings in 1979, FIM has grown to become a significant player in the UK market with assets under management equating to approximately 300 million in its renewable portfolio and 913 million in all of its funds. The chief operating officer was buoyant about FIM s acquisition opportunities: There is a lot of solar on the market. They tend to be round about the 5 MW size because of EIS schemes that started a few years ago - we are seeing quite a few assets come to market. The firm currently manages six wind farms totalling 106 MW capacity and six solar parks with a combined capacity of 31 MW, split across separate investment vehicles. Some of the institutional investors are looking at solar as well as wind so there is a buoyant market but there is also a lot of investor interest. We are going to fundraise for solar in the summer, round about the same time we are going to extend our wind farm fund as well - that is operational wind, explained Cranstone. Despite no new government subsidies, both ground-mounted solar and onshore wind supply costs in the UK have dropped over the last couple of years thereby improving the economic viability of projects. Probably the same amount 20 million to 30 million [for] UK operational wind rock projects. If there was a CfD project that comes on the market then we would look at it. As this trend continues in 2018, FIM should not be hard pushed to source new financing for its clean energy funds. Monthly Review - February 2018 page 9

10 BBVA AWAITS EU VERDICT ON GREEN BONDS The European Commission (EC) is expected to release new legislation in March for a financial system that supports green bonds, and Spanish multinational banking group Banco Bilbao Vizcaya Argentaria (BBVA) is awaiting the EU s final verdict on green bonds. Clean Energy Pipeline s figures. However, investor interest will have to grow if the green bond market is to at least double in size to achieve the EU s decarbonisation targets. In order to hit the EU s 40% greenhouse gas emissions reduction target by 2030, the commission said it would have to mobilise an additional 180 billion of green investments every year. I think that there has been an ongoing increased interest from investors to decide how to allocate their money, Romero told Clean Energy Pipeline. A final report from the High-Level Expert Group on Sustainable Finance (HLEG) was released last week outlining strategic recommendations to help the EU achieve this target. For me this is the main feature of the green bonds as they give investors the opportunity to place their money with a purpose, and a purpose that will be beneficial for the planet. The report put forward many proposals including a sustainable finance taxonomy, sustainable finance standards and the development of a pipeline of investable assets. Julián Romero, Head of Sustainable Bonds at BBVA, told Clean Energy Pipeline that the bank is hopeful that the EU s new legislation will reduce the capital requirements for financing of green bonds. This is a big difference between a green bond and a bond that is not green. There have been some interesting regulatory initiatives leading investment funds to invest in green bonds to better comply with requirements of transparency, for example making public the carbon footprint their portfolios produce. We are waiting for their recommendations in a few weeks, it is true that there s been some comments anticipating their consideration around a discount factor for the bank capital requirements. This will be included in the agenda but we still need to see how [it] will be treated and landed. Mainly this will allow more leverage [and will] encourage the financing of new eligible projects and they will become more affordable. It is not going to effect the quantity as much but the feasibility of the eligible projects, potentially coming cheaper from the funding point of view. PR stunt? Romero maintained that there is a genuine interest on behalf of investors to fund environmentally-friendly projects. You may be aware of different pledges that intuitions, (financial institutions, insurance companies, corporations, etc.) are publishing, he said. They are trying to be part of the solution, and it is true they imply an element of PR. [The] fact is that they will help to genuinely invest in projects [that are environmentally] beneficial or divest in those detrimental for the environment, and fact is that [there] is an important reputational risk embedded. Investors keen to go green The green bond asset class has grown dramatically since the first launch in 2013 with issuances breaking the $100 billion mark for the first time in 2017, eventually reaching $128 billion, according to The EU will likely release new legislation in Q1 that will give clarity and instigate new investment in the green asset class. With BBVA reporting strong investor appetite in the market, the green bond floodgates may open wider. page 10

11 NEW BSR DIRECTOR TALKS O&M IN THE UK Over the past few years BSR have been successful in developing a strong O&M offering across 50 sites in the UK totalling 536 MW, Harnack told the publication There are 8-9 GW of solar built in the UK which provides a number of opportunities in the marketplace to look to grow the BSR portfolio further in the next few years. A particular goal of BSR will be to grow its 6% market share of the UK s operating solar market. Thriving secondary solar market Harnack explained that this could be done by building on the relationships with asset owners that BSR already has in the market, as well as bringing on board new O&M clients. Matthew Harnack spoke to Clean Energy Pipeline this week about his new appointment as Operations and Management Director at UK low carbon service provider British Solar Renewables (BSR) Group. Harnack brings over 20 years of industry experience to the role, most recently serving as commercial director at UK energy storage firm Powervault. He has also worked as Director of Sustainable Energy at New South Wales s department of energy, Head of Renewable and CHP Operations, and Associate Director, at Ofgem E-serve, and Head of Feed-in Tariffs at Good Energy. Graham Harding, Managing Director and Chief Financial Officer at BSR, told Clean Energy Pipeline last month that the company s key focus in 2018 would be growing its O&M business at home in the UK, and the new appointment certainly puts the company on track to do so. Growing BSR s market share Clean Energy Pipeline caught up this week with Harnack to ask him about some of the challenges the company faces in upscaling the O&M business. He added: Having a 6% market share currently gives us plenty to target for the future. Clean Energy Pipeline s latest figures have revealed a thriving second market in the UK, where asset managers particularly increased their level of investment in the solar project sector last year. Clean Energy Pipeline s data team recorded $2.5 billion of solar power plant acquisitions over the course of 2017, marking a 31% increase on 2016 s M&A project investment. Harnack said there were a number of levers available to allow asset owners to improve the yields from their solar parks, but most importantly: The key is to have an open and constructive dialogue between the asset owner and the O&M provider to establish the best opportunities for each site and to be clear on the cost benefit analyses on a case by case basis. With Harnack most recently working at Powervault, the new O&M director said that BSR would also look to develop its experience in the energy storage sector, especially as the size of the opportunity grows. Harnack concluded: BSR will aspire to be one of the leading providers of O&M services in the UK by delivering high quality O&M services to our clients. Monthly Review - February 2018 page 11

12 CHINESE INVESTORS VERY KEEN ON EUROPEAN CLEAN ENERGY AND TECH Yin Yang, a partner at London-based specialist advisory business Partner Capital told Clean Energy Pipeline that its Chinese investor clients were very keen on financing clean energy assets and clean tech in the West. As the largest clean energy market in the world, China is home to a plethora of fund managers, government-backed financiers and institutional investors and shows no signs of shrinking its investment kitty. Typically they are corporates, some of which are state-owned enterprises and some other fund managers. The state-owned enterprises are very keen to invest in and cooperate with clean energy technologies that are more advanced over in the West. They are keen to import back some of the technologies from over here as well as investing in them; that is quite a common theme. China s National Energy Administration said at the beginning of 2017 that the country would invest $360 billion into renewable energy by There is obviously a big theme of China investing in a number of different asset classes in the West and we facilitate much of that inbound investment. Moreover, according to Clean Energy Pipeline s figures, project finance alone in China surpassed $50 billion last year. With roots stemming from Hong Kong and mainland China, Partner Capital has a strong focus on the European inward investment story supporting financiers from China who are always willing to take their capital abroad. Projects all over Europe Yang revealed that Partner Capital works with its Chinese partners to find the right clean energy projects, no matter the location. One company in which the Chinese is weighing for a potential investment Mavel, a hydro OEM from the Czech Republic. We are typically involved with Chinese investors developing projects in Europe, Yang told Clean Energy Pipeline. We have a hydro project in the Czech-Republic that we are working on at the moment that is very interesting, and in Spain we are involved in solar, [though] we are not country specific. page 12

13 UK investments Another company that Partner Capital is advising Chinese investors on is UK-based Naked Energy, which has developed a hybrid solar technology generating both heat and power. We have a solar project which is for electricity and hot water, said Yang. It is being run for a test period for one of the UK s leading supermarkets and also a leading hotel chain in Spain. The Chinese investors, which could not be disclosed, are also considering an investment into the 180 MW Morlais tidal stream energy project in Wales. We would like to be involved in battery storage, there is great interest from China in battery storage. Certainly, it is an area which we would be very interested in, Yang continued. In the wake of Prime Minister Theresa May s initial trade meeting with China s President Xi Jinping, closer UK-China relations are an increasingly likely prospect. UK-based cleantech firms and developers would prosper from the increased investment opportunities that unity with the world s largest renewable energy market would bring, especially considering the appetite of Chinese investors to tap European markets. He said: We are also involved in a tidal project in Wales, which is part backed by the EU but is also looking for private investment. Once completed it would be the largest tidal project in the world. Yang would not rule out investments in other clean tech firms and cited energy storage in particular as an interesting proposition. Monthly Review - February 2018 page 13

14 TRIODOS BANK TO GROW LENDING ACTIVITIES Bazin told the publication that its work 2018 would continue to push out its core tenets of innovation and diversification. As a European bank, Triodos targets the larger economies that emit a lot of carbon and therefore are looking to invest in different ways to create sustainable energy systems, whether that be renewable electricity, heat or smart grid networks etc. Triodos core markets to date have included: the Netherlands, Belgium, France, Germany, Spain, the UK and Ireland. Philip Bazin, manager of Triodos Bank s environment team, told Clean Energy Pipeline, that the European bank is looking to grow its lending activities to the clean energy project finance sector this year. Clean Energy Pipeline s project finance database places Triodos Bank as one of the most active lenders in the sector and, according to Bazin, its work in the renewables sector so far shows little sign of slowing down. If anything, Triodos is to expand the scope of its lending work across the clean energy spectrum. We re looking to grow our lending, and we ve got to continue to innovate and diversify our approach, said Bazin. That s a key theme to our strategy and to how we deliver our vision. It s a lot easier to be a late adopter and a conservative bank, targeting just subsidy regimes, but that isn t going to help going forward and achieve energy systems that are 100% sustainable. As such, Bazin explained the growth in its lending activities would be mirrored by a broadening in the type of technologies that could potentially benefit from Triodos backing. Boon for clean tech What I do in my team and what my colleagues do in their teams is very much about delivering on the promise to Triodos customers that 100% of all loans and investments the banks make will have a positive social, cultural and/or environmental impact, Bazin explained. From the very beginning, Triodos was set up with the mission to find ways to support the financing of sustainable energy. We view ourselves as being an important player because we try to be active in the parts of the market that are less well structured. We are also developing our ability to provide financing to support not just the generation assets like renewable electricity projects; technologies that are well understood now (offshore wind, solar etc.), but we are looking at the infrastructure between generation and supply, Bazin continued. This year is a potentially important year for us, because we [have now] financed our first energy storage projects; we did our first financing in the UK and Germany, where energy storage is being used as means to provide grid balancing services. You see it at the top of the league tables where last year we completed 65 transactions, though the average size will be relatively small. We have got a core customer base which is quite different to that of the banks that are financing the big utilities. Upscaling European lending Another example of the widening of Triodos lending activities includes a specific investment into a German distribution network operator, while the bank is also looking to provide finance to the smart metre roll-out programme in the UK. Bazin also told Clean Energy Pipeline that the bank would look to improve on the five energy efficiency project finance investments that it made last year. page 14

15 CEE GROUP PLANS NEW FUNDRAISING, IN MIDST OF SOLAR PV, WIND INVESTMENT STRATEGY Jens Schnoor, Investment Director at CEE Group, told Clean Energy Pipeline that the German private equity firm was currently in the midst of placing the proceeds raised from its fifth fund in European renewable energy assets and was confident investors would take up the opportunity to back its follow-up sixth fund. Placing fund five To date, CEE Group s model for financing its wind and solar acquisition has been through fundraises that are backed by institutional investors. CEE Group s steady involvement in the solar PV and onshore wind sector has now resulted in the German company building up a 50-strong portfolio of clean energy assets. The company is currently in the midst of placing the proceeds of its fifth fund, with very strong plans to raise capital for a new fund, according to Schnoor. According to Schnoor, CEE Group has always seen solar and wind as a stable investment, and its confidence in the asset class would again lead the investor to new commitments. The strategy of CEE is to further invest in PV and wind farms, and we see quite a few of possibilities for our investors, Schnoor told the publication. We are ready to look at that and prepare the necessary papers to get the approval. For its future fundraising activities, Schnoor was confident that CEE Group would be able to tap many of the same institutional investors to once again commit to its fund activities, as well as sourcing new backers. For the time being we are investing money out of fund five, and we are working on setting out additional funds in the future, Schnoor explained. The money we are investing right now has already been raised in the past and we are in the process of finally placing at the moment. CEE Group torn between wind and solar New fund on the horizon CEE Group s solar and wind portfolio currently totals 630 MW, which was reached after adding its 50th asset to its holding earlier this year through a 13.2 MW wind farm acquisition in Brandenburg, Germany. CEE Group s portfolio is currently split between 28 solar parks and 22 wind farms, located in Germany, France and the UK. In the past, Germany was quite a secure and interesting market because of the EEG, which gave a legally binding basis for the investment, Schnoor said of CEE Group s core markets. Where the Feed-in tariff has been reduced, we have a bidding process now for photovoltaic and wind, but we still believe there may be opportunities for us in the future, although there have been some changes in the legal framework of the EEG. For France and the UK, we are already invested in this market and we still see opportunities in those markets for the future. He continued: Our impression is that France is a very active market and a lot of investors are very interested in acquiring projects there. In addition to the trifecta of European clean energy markets that CEE is already involved in, Schnoor also pointed to the likes of the Netherlands, Spain and Scandinavia as being new markets under review for potential asset acquistitions. CEE Group s investment director revealed: We are thinking about setting up new funds. With this new equity, the idea is to invest this equity in wind and PV, and not only in the markets I mentioned, but we will also be looking into additional markets in Europe, I wouldn t say the limit is the sky, but we don t have a designed limit for these investments. For the time being, we have institutional investors like pension funds, insurances, utilities; they are invested in our funds [and] we believe that those investors for whom we have successfully invested their equity within our fund will also [participate] in such investments in the future. We believe that renewable energy is something where institutional investors would like to put their money into. Monthly Review - February 2018 page 15

16 TRIG SETS SIGHTS ON NEW OFFSHORE WIND DEALS New opportunities in the offshore wind sector have definitely sparked the interest of The Renewables Infrastructure Group Ltd. (TRIG), according to Richard Crawford and Jaz Bains, Investment Manager and Operations Manager for the London-listed vehicle, respectively. The two TRIG heads spoke to Clean Energy Pipeline today at the release of its interim financial results for The results indicate both strong returns for its investors and a strong year for portfolio investments, crowned by its first ever offshore wind deal via the Sheringham Shoal transaction. I would say we re seeing increased amount of development activity in offshore wind that is being very heavily led by the UK and Germany as the leading markets, Crawford explained to Clean Energy Pipeline. But we re seeing other offshore markets starting to develop elsewhere within Europe. TRIG is limited to 20% [of our investments] outside onshore wind and soalr PV, but we do see offshore wind as being increasingly acceptable for investors And if you take the aggregate of our offshore and battery investment, I think we re at 9% of the portfolio. Strong investments consolidate TRIG s sector holdings TRIG increased its renewables portfolio by over 15% after making 230 million of investments over the year, split between four acquisitions and three follow-on investments, which included its first offshore wind and battery storage deals. New investments over the year took TRIG s net output to 821 MW totalling 57 portfolio projects across the UK, Ireland and France, and for the first time its portfolio was valued above the 1 billion mark. We ve had a very good set of results, good underlying asset performance, strong production and valuation gains flowing through into the numbers, Crawford continued. Net asset value is pence per share, that s an increase of 3.5 pence per share over December Earnings are up 9.8 pence per share versus 2016 and profit before tax is 90.2 million, and that compares with 67.9 million for the corresponding period. TRIG s positive results were said to have come from identified cost reductions within the portfolio, some refinancing gains and some increased demand for the assets that were reflected in the valuation. The only downside came from lower price forecasts, effected by reduced gas prices within the wider industry. page 16

17 Reasons for offshore wind interest Bains and Crawford told Clean Energy Pipeline that falling costs were the primary driver for TRIG s exclusive focus on onshore and offshore wind investments in 2017, as opposed to solar type deals, which in turn gives way to the amount of new project opportunities being brought to the market. Crawford added: Wind has been particularly successful in reducing costs and obviously that is giving the impetus to offshore wind, and we re seeing reducing costs as well for onshore wind. In the UK, we ve had 4.3 GW of wind added in 2017 through a combination of offshore and onshore, that is significant and we are see this flowing into deal flow. This would make then wind the natural investment proposition for TRIG given that it invests in projects just before the construction stage. Since the cut off on subsidies, there s no new solar development going on as such, said Bains. That ll then reduce the amount of product that comes to market from the solar sphere in the UK. On the other hand, you do see the offshore wind developments continuing, and within 18 months, you ll see more unsubsidised onshore wind in the UK. In terms of new geographical investments, the UK is likely to continue to attract the best part of TRIG s attention. However, Crawford pointed to several other geographies that would add to its Irish and French portfolio buys. Ireland and France currently make up 17% of the portfolio, and the investment limit can be up to 50% outside the UK, said Crawford. We tend not to find sufficient value in the German market because it s a very popular investment for domestic investors there. But Ireland, France, Benelux, and the Scandinavian countries are all possible. Monthly Review - February 2018 page 17

18 QUERCUS CEO TALKS UP NEXT 100M FUNDRAISE & TIMETABLE FOR 600 MW IRANIAN SOLAR European investment firm Quercus Asset Selection is on schedule to raise another 100 million over the next few months for its three clean energy funds and start construction on the first phase of a 600 MW solar project in Iran in the third quarter of Iranian bilateral trade relations, also signalling one of the single largest investment s in Iran s energy sector by a UK-based firm since international sanctions against the Middle East country were lifted in CEO and co-founder Diego Biasi updated Clean Energy Pipeline on what is to be a hectic year for the clean energy investor, especially as its first investment outside of Europe is taking place in a market with a rather rocky political landscape. Given the signs of bubbling civil and political unrest in Iran since then, Clean Energy Pipeline asked whether political risk had done anything to slow the project s development or sway potential investors. But sticking to Quercus traditional line of business, Biasi explained that the investment manager was well on track to raising at least 100 million for the second close of its three clean energy funds. The fundraising is continuing along the current schedule and we will have a second closing before the end of summer, Biasi revealed to Clean Energy Pipeline. Out of the half a billion euros minimum target, we have already raised 200 million. At the moment we haven t been effected by the political developments, Biasi commented. We re still entertaining conversations with the same investors, and of course everyone is looking at the geopolitical situation, but so far we ve managed to move forward with our schedule with what has been developing around the world that relates to Iran. We have been talking to a number of investors so far and we have been talking to the same ones [that we started negotiations with previously]. We expect to have this closing before summer for another 100 million at least, and then target a final closing in summer 2019, which will bring us to 500 million altogether across the three funds. They are very keen on starting the project. What we have seen is for those investors that can take exposure to Iran the interest is very high. Quercus three funds are running in parallel to give more options to investors, with one fund investing solar in Italy, the other investing in wind in Italy, and the third in various technologies in Europe. Biasi said that relatively equal commitments had been made so far across the three funds and that he again expected equal commitments of about million over the three Quercus funds. Is Iran a risky investment proposition? Biasi added global law firm Dentons has been heavily involved in the permitting process, with partner Ramin Hariri taking a leading role. Looking further afield Biasi expressed his confidence to Clean Energy Pipeline that Quercus remained well on schedule to hit second close for its three clean energy funds and start construction works on the landmark Iranian solar project. Last September, UK and Iranian government officials convened in London to celebrate the launch of development works for a new 600 MW solar PV project being spearheaded by Quercus. With regards to the latter development, Biasi added that it signalled what will be a growing trend of scouting new international investment opportunities within the renewable energy sector. The 600 MW solar plant is being developed to be built in several phases over a three-year period, with 100 MW of stand-alone solar lots to be commissioned and operational every six months to mitigate against construction risk. The final agreement signing marked a major milestone for UK and We are looking more and more outside Europe, said Biasi. Europe is an advanced and mature market for renewables, returns are going down because there is quite strong competition. And like many other competitors of ours, we are increasingly interested in developing the business outside of Europe. page 18

19 ANALYTICS & GRAPHS Monthly Review - February 2018 page 19

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26 LATEST CLEAN ENERGY MARKET REPORTS Get your free copy of our latest market reports at: Renewable Energy Discount Rate Survey Results European Wind Investment 2017 Solar Infrastructure Investment in South East Asia US Renewable Energy Brief - Tax Equity Landscape Clean Energy Pipeline understands the global renewable energy investment landscape and delivers real-time news, transaction data and analytics on this increasingly complex sector. Our in-house team identifies the latest investment, M&A, project finance, fund and regulatory announcements. In addition, we deliver proprietary content including interviews, analysis, insight reports and events. Find out how we can support delivering on your business objectives by contacting: Sonja van Linden Tol on +44 (0) or sonja. vanlindentol@cleanenergypipeline.com Clean Energy Pipeline 79 Wells Street London W1T 3QN Tel: +44 (0) For more information about Clean Energy Pipeline: page 26