NTR commits €50m for fund to be backed by UK giant
Irish energy group NTR expects the bulk of the 270 megawatts of wind assets it is aiming to develop through a new investment fund will be constructed by the end of 2017.
NTR announced yesterday that Legal & General Capital, the investment arm of FTSE 100 firm Legal & General Group, has committed to funding up to 47.5pc of the vehicle.
Legal & General is one of the largest companies in the UK and had revenues of £10.2bn (€13.9bn) in the year to the end of 2014. NTR aims to raise €250m of equity and €420m of debt to construct the windfarms with a cumulative capacity of 270 megawatts across Ireland and the UK.
It has committed €50m of its own capital to the project, which is the company's first major venture since the demerger of its European wind business. In November, NTR, which was one of Ireland's best-known public companies, demerged its wind energy business and transferred its remaining investments to a new holding company
Although keeping the name NTR, its business model has dramatically changed. Whereas it once owned assets including the Westlink Toll Bridge, recycling firm Greenstar, and a chunk of wind energy firm Airtricity, chief executive Rosheen McGuckian, pictured, said the company is now focused on developing investment vehicles for renewable energy projects.
A total of €219.1m of cash and wind assets were transferred as part of the demerger. As part of the demerger process, shareholders in NTR have been offered a redemption of €2.25 per share by the demerged company. NTR's biggest shareholders include Dreamport, which is controlled by chairman Tom Roche. It has a 38pc shareholding and will not take part in the share redemption, which is set to close in mid-April.
NTR CEO Rosheen McGuckian said that if the rest of the shareholders choose to take part in the redemption there would be about €85m in cash left, of which €50m is now committed to its new fund.
NTR said it has partnered with Legal & General to look at other investment opportunities in the renewable energy sector. Ms McGuckian said: "The intention wouldn't be that it is the one and only fund with Legal & General, we would be looking to do others in the future in the renewable energy sector [but] the number one priority is to invest in this one at the moment."
She added: "We would be confident we will get the €250m [in] the first quarter of 2016. Debt will be raised on a project by project basis."
NTR will spearhead the development of the windfarms and manage the operations. It has already acquired the first four assets for the fund, which total €62m in equity and will provide a combined capacity of 55MW.
One of the assets is in the Republic of Ireland and Ms McGuckian said the fund is looking at acquiring more assets both here and in the UK. She estimated that most of the windfarms will have an operational lifetime of about 25 years. She said investors in the fund can expect a return of about 9pc.
"We have started building already, we intend to invest between now and the end of 2017, we will be finished construction on most of the projects by middle to the end of 2017," she said.