Thursday 22 February 2018

Coillte seeks partner for renewable energy shift

Fergal Leamy
Fergal Leamy
Colm Kelpie

Colm Kelpie

Coillte is looking to establish a joint venture to help develop its renewable energy ambitions and strategy.

The State forestry agency said it is looking for a partner to work with it on its land over the next 10 years to help realise its potential.

The commercial semi-state has identified around 1,000 megawatts of development for wind and renewable energy projects on its land. But it believes that to press ahead on its own would take considerable equity and "unbalance" the business.

It wants a partner to come in and prop up its plans with finance, and potentially skills and knowledge to enhance Coillte's own offering.

Fergal Leamy, Coillte CEO, said the agency is looking to have financial advisers in place by September and the partnership done by the first three months of next year.

He estimates that to develop 1,000 megawatts would cost between €300m and €400m.

"It's a sizeable portfolio, when you think about the cost of developing each megawatt, and the debt financing," he said. "As a board, we have made a decision that this is not something that we feel that we should be doing on our own.

"We feel that the opportunity is huge here. To partner with somebody, we're going to maximise the value but we're also going to manage the risk from our company perspective as well."

Coillte is tendering for financial advisers for the plans. As part of this, Coillte may also look to sell one or more wind farms in its portfolio.

"Longer term we don't see ourselves as a utility company, we see ourselves as a developer of wind assets," Mr Leamy said. "Part of this process, one way of financing might be to sell down one of the farms that we have already, and then reinvest it, because there are quite attractive yields out there at the moment."

Results reported by the agency last month showed that the amount of cash generated by Coillte surged 130pc last year to just over €15m.

The commercial semi-state is aiming for an operating cash flow of just over €60m by 2019.

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