Tuesday 21 November 2017

ESB's €200m green tech investment fund falls into the red

Greencoat’s Ronan Murphy, Bertand Gautier and Paul O’Donnell
Greencoat’s Ronan Murphy, Bertand Gautier and Paul O’Donnell

Gretchen Friemann

The ESB's €200m green technology fund lurched into the red last year in a sign its bets on emerging technologies have so far failed to bear fruit.

According to the latest filed accounts for ESB Novusmodus GP Limited, which is managed by London-based adviser, Greencoat Capital, the fund's €148,000 profit in 2015 withered to a €518,000 loss in 2016.

The ESB declined to explain the performance, stating "for commercial reasons" it was unable to "discuss the status of individual investments".

But the State-owned electricity board said "we expect, as a fund that invests in emerging companies and industries, that there will be gains and losses across the portfolio of investments".

So far Greencoat has deployed 85pc of the vehicle's funds. It's thought the London-headquartered manager, which also runs the recently floated €270m Irish energy company Greencoat Renewables, has pumped a sizeable amount of the vehicle's money into emerging technologies in the UK. In the past Novusmodus has booked write downs on an investment in Geothermal International, a UK designer and installer of heat pumps.

Close to €8.9m was injected into a US VC fund of Vantage Point Venture Partners, which has backed electric car maker Tesla, but delivered varying annual returns, some as low as 1.9pc, since 2009, according to the 'Sunday Independent'.

Another estimated €3m was invested in Dublin firm Intune Networks, a broadband fibre company supported by Dermot Desmond and telecoms entrepreneur Barry Maloney, but which subsequently lapsed into receivership.

Back then the ESB described cleantech investing as "high risk" but said "ultimately the return on successful investments should outweigh the losses on those that are unsuccessful", According to the accounts Novusmodus racked up an operating loss of €521,000 for the financial year ending in December 2016 - marking a dramatic reversal to the €144,000 chalked up in the previous year.

Last year the ESB asserted Novusmodus is performing above average for its sector and said the fund is expected to exit its investments within the next five years. On its website Greencoat states its management of Novusmodus aims to exploit commercial opportunities brought about by a large-scale transition to a low carbon global economy.

The firm was unavailable for comment.

Irish Independent

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