NTR plots €500m capital raise to fuel portfolio expansion

Renewables company is planning to launch a new fund by the end of 2017

TOLL road operator turned renewables outfit NTR is looking to raise €500m to build its portfolio.

The capital raised will be used for a new green energy fund. It follows on from a €250m fund raised in 2016 which was open to outside equity investors and has been used to buy wind farms in Ireland and the UK. That fund was boosted by project finance in addition to the €250m of equity.

The company’s website says it is planning to launch its “Renewable Energy Income Fund 2” in 2017 and that it will “invest in wind and solar projects, together with some energy-storage projects in select European countries”.

Details of the fund’s scale emerged in an interview NTR’s chief investment officer Manus O’Donnell gave to renewable energy trade publication reNews earlier this month. O’Donnell said that the company was looking at projects in France, Italy and Scandinavia. NTR would not make any further comment when contacted by the Sunday Independent.

O’Donnell said that the company has lifted its headcount in order to deal with the expanded portfolio and that it was eyeing opportunities to deploy the remainder of the €250m fund. About €60m is remaining. O’Donnell said the initial fund performed about as well as the company expected, blaming large hikes in local authority rates for underperformance in some of the assets. NTR has purchased projects in Meath, Antrim, Kerry and Fermanagh as part of the fund, as well as a number of projects in the UK.

Irish assets will probably make up part of the purchases made from the new fund and in that regard NTR will be competing with Greencoat Renewables, which has raised €270m as part of its drive to build a portfolio of Irish renewable assets.

Greencoat had initially planned to raise €250m but lifted that sum on foot of strong demand. It bought its initial Irish assets from Canadian giant Brookfield Renewables, which has guided that it wanted to recycle capital in the Irish market.

O’Donnell told the publication that NTR had been reducing its yield expectations because of market dynamics which are seeing assets being sold for higher premiums.

NTR hived off its European wind business two years ago with the remainder of its assets — including legacy toll road assets — being placed into an entity called Altas Investments.

Altas is led by former Independent News & Media ceo Vincent Crowley.