Friday 24 November 2017

Gaelectric set to raise €450m in funding for growth plans

Irish renewable-energy firm may decide to float on stock markets in two years

Irish renewable-energy company Gaelectric is to complete a near-half billion euro funding round in September
Irish renewable-energy company Gaelectric is to complete a near-half billion euro funding round in September
Gavin McLoughlin

Gavin McLoughlin

Irish renewable-energy company Gaelectric is to complete a near-half billion euro funding round in September.

The €450m package will be a mix of debt, equity and project finance. The company's partners in the deal are Nordeutsche Landesbank, Swedish investment company Proventus, UK-headquartered Bluebay Asset Management and others.

A Gaelectric spokesman said: "The process, which will complete in September, will give Gaelectric a substantial financial platform of low-cost long-term capital to complete its current acquisitions and build-out programme, leaving the group with circa 400MW of generation by the end of 2016."

The company is currently in talks to acquire new assets.

Gaelectric chief executive Brendan McGrath told the Sunday Independent that within two years, the company will have to decide on listing on the stock exchange.

"We are pursuing a number of options at the moment. Basically, we're starting the process in terms of how we secure our long-term future...that'll be started in earnest when we complete our current funding round, but it will push on fairly quickly.

"I'd say within the next two years, we'll have to decide on which road we want to go. That will be influenced by the market, and it will be influenced by our ability to convince either equity investors to come in by way of trade or by way of financial houses, or basically whether you just go to the market.

"IPOs have to be on the cards in terms of what we look at - but that can be very much determined by the market. It can be very much determined by how people see you and how the market sees you.

"Depending on the roll out of the mergers and acquisitions programme... we're probably at a stage where we will have between 400 and 500 megawatts of spinning assets by 2017. Depending on how successful we are, our yearly revenue at that stage will be between €70m-€100m."

Gaelectric's core interests are in wind, biomass and energy storage. It recently signed a deal with Elon Musk's Tesla to collaborate on a renewable-energy storage project aimed at reducing the need for renewables to be backed up by fossil fuels. The company is also involved in solar projects in the UK.

Geraldine Kelly, a former managing director of carbon solutions at ESB International, is about to join the board, and Dr Chuan Zhang, a former general manager at Airtricity, will become chief technology officer later this month.

McGrath criticised the recent trebling of business rates for windfarms in Limerick, brought about by a national rate-revision process led by the Valuation Office. Teresa O'Flynn, a director at Blackrock, the world's largest asset manager, said the hike is of serious concern to her company.

"There have been discussions in the industry in relation to how did this happen," McGrath said. "How did it happen that rates went from €7,000 to €21,000? It makes no sense."

Sunday Indo Business

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