HIH Invest Real Estate has set up its first Article 9 green energy investment fund. HIH Invest is looking to grow the HIH Green Energy Invest fund, which will pursue long-term investments in photovoltaics and onshore wind power projects, to €750m.
The fund is seeking assets work between €20m and €120m in its primary target countries of Germany, France, Italy, and Spain. The fund will also consider opportunities in the Benelux countries, the UK, Ireland, Poland, Portugal, and the Nordics, and it is expected that net cash-on-cash returns will average 5.5%.
Kristof Krull (pictured right), head of infrastructure at HIH Invest, said: “What makes this a reasonable target are not least the perfectly predictable revenues. Solar irradiation and wind force can be reliably forecast, power purchase agreements have long terms, and the demand for electricity is growing.”
Alexander Eggert, managing director of HIH Invest, added: “For HIH Invest, the new fund is a premiere in more ways than one. For the first time, we are venturing outside the classic real estate sector and entering a new asset class that, while having a lot in common with it, differs in many ways from our accustomed business. We have pushed forward with the diversification of our product line-up over the past few years, and are opening up new growth areas. This gives us an even broader range of options to meet our clients’ needs.”
The fund has already acquired its first asset – a wind farm with 13.2 megawatts output in the French Loire region, which was bought from BayWa r.e France.
André Rolff (pictured left), head of transaction management Infrastructure, said: “The wind farm will generate attractive feed-in revenues via a government-guaranteed feed-in tariff that is valid for an operating period of 20 years and is inflation-indexed, too. This enables us to secure stable long-term earnings for the HIH Green Energy Invest fund.”
Tax due diligence was performed by KPMG and legal due diligence was carried out by the law firm of Klein Wenner in Paris. RINA Consulting was responsible for the technical due diligence and the insurance due diligence was done by Gossler, Gobert & Wolters Assekuranz-Makler. Dutthileul & Associés conducted the financial due diligence.
