€250m ESM listing first for Greencoat Renewables
Ireland's first stock-market-listed renewable energy firm, Greencoat Renewables, will raise €145m from investors when it makes its debut -with an additional investment of up to €105m from AIB and the State's Ireland Strategic Investment Fund (ISIF) set to give it a €250m market capitalisation.
Greencoat will float on London's Alternative Investment Market (AIM) and Dublin's Enterprise Securities Market (ESM) in the middle of July.
The firm's manager is London-headquartered Greencoat Capital, which is also the investment adviser to a €200m ESB greentech fund. Bertrand Gautier and Paul O'Donnell will lead the Greencoat Capital team that manages the Greencoat Renewables assets.
AIB and ISIF provided a €105m seed investment in March to bankroll the acquisition by Greencoat Renewables of the 100MW Knockacummer windfarm in Co Cork, and the 37MW Killhills wind farm in Co Tipperary. The bulk of the investment by AIB and ISIF is being rolled over into equity as part of the flotation. Those assets were bought from Canada's Brookfield Renewable Partners, which acquired them as a portfolio of Bord Gáis Energy assets that were sold by the Government to meet Troika targets.
AIB has committed to between 10m and 25m shares in Greencoat Renewables, while ISIF has committed to between 76m and 80m. The shares are being sold at €1 each.
The Greencoat Renewables non-executive board will include former PwC senior partner Ronan Murphy; the chair of solicitors group Mason Hayes & Curran, Emer Gilvarry, who was also managing partner and is a former Aer Lingus director; and Kevin McNamara, a former ESB International executive who was most recently the chief financial officer of Amarenco, the renewable energy firm. Greencoat Renewables will initially target acquisitions in Ireland, but within two years expects to be looking abroad, citing Germany, Finland, Belgium, the Netherlands and France as providing expansion opportunities.
Speaking to the Irish Independent, Mr O'Donnell said that it's likely to be two years before the company targets investments outside Ireland, while both he and Mr Gautier declined to say when the firm might look at an additional equity raise or what type of debt facilities it hopes to finalise.
The company is targeting an investment rate of return of between 7pc and 8pc.
"We see a number of opportunities in the Irish market," said Mr O'Donnell. "We think there's a really interesting opportunity to consolidate on the big and the small assets, but we don't put a timeline on our next acquisition.
"Investors invest to get a return on their equity," he added. "We need to be fully invested to be able to give them that return. We never hold cash."
An ISIF spokesman said it aimed "to benefit the Irish economy both by investing and by being a catalyst for attracting co-investment from private sector investors".
"ISIF, through this investment, is seeking to facilitate attracting investors who heretofore have not been invested in Irish renewables," he added.
"ISIF is of the view that this will enable the recycling of capital from current owners of Irish energy wind assets back into their core businesses and development pipelines - increasing the velocity of capital recycling within the sector and thereby enabling the development of further renewable energy generation."
Meanwhile, Scottish Equity Partners says it has provided finance for the €8.7 million, 4.6MW Curraghderrig wind farm in Co Kerry developed by Rengen Power.