Recycling of State energy assets looks a bit odd
It's a common trait of renewable generating assets, especially wind farms. They tend to get recycled. So you end up in a position where a couple of wind farms sold by the State two years ago are bought back by a company in a deal bankrolled by two different State-owned bodies - ISIF and AIB, at a premium.
ISIF and AIB will now roll over their funding into equity in Greencoat Renewables in July when it floats on the stockmarket. AIB will take some money off the table as part of the deal.
The optics of all this looks fuzzy. Does it really make sense for one State body (the two windfarms that form the foundations of Greencoat Renewables were originally sold by Bord Gáis Energy) to offload assets, only for State-owned entities to later fund their repurchase by a private company? Greencoat also manages funds for the ESB.
Paul O'Donnell of Greencoat says ISIF is trying to play a deeper role in renewables, acting as a lure to other investors that might not otherwise get involved. The flotation, he adds, will give the likes of pension funds a chance to invest in the operational renewable sector that they might not have otherwise had.
"The role of having long-term institutional capital in the Irish renewable market will help to grow the market overall and provide confidence to developers and utilities to continue to recycle their capital into new projects," he said.