Renewable energy group powers ahead
SUSTAINABLE investment is all the rage these days, as investors look for companies that do not just generate returns but are good corporate citizens as well.
The Renewables Infrastructure Group, known as TRIG, ticks both boxes. The company owns and operates more than 70 wind, solar and battery storage projects in the UK and continental Europe. These have been carefully selected to deliver long-term returns, which fund a healthy and progressive dividend.
Midas recommended TRIG, when it first came to market in 2013 at a price of £1, promising a dividend of 6p. At the time, the company had 18 investments, mostly in the UK and capable of powering 150,000 homes.
Today, TRIG’s assets span Europe and generate enough power for a million homes, reducing carbon emissions by a million tons a year.
At the same time, the share price and dividend have risen steadily.
The stock closed last week at £1.36, it is targeting a 6.4p dividend this year and payouts are expected to increase next year and beyond.
Investing in renewable energy projects requires experience and expertise. The sector is highly regulated, with different subsidies, tariffs and planning restrictions across Europe. The UK, for example, no longer subsidises new onshore wind farms but it does offer special tariffs to offshore wind projects. Sweden encourages onshore wind farms and turbines can be up to 50 per cent higher, so they generate substantially more energy. Spain does not subsidise solar plants but production is so efficient that subsidies are no longer needed.
TRIG’s management structure is designed to navigate through these differing regimes and find projects that offer good value for money and the minimum of regulatory risk. The company works with two leaders in the renewable energy field, InfraRed Capital and Renewable Energy Systems.
InfraRed has been investing in this sector for almost 20 years and is responsible for sourcing deals. The firm has an extensive network of contacts so it is frequently presented with transactions before the rest of the market. Renewable Energy has been in the industry for even longer and operates TRIG’s assets once they have been acquired, using its nous to make sure that equipment is safe, sound and capable of delivering the maximum amount of energy.
Today, around half of TRIG’s portfolio is in the UK, including several sites in Scotland, where the weather is windiest. The rest of the assets are in Ireland, France, Germany and Scandinavia. Looking ahead, the group expects to increase its exposure to mainland Europe, as there is often more value to be had.
Wherever TRIG invests, however, chairwoman Helen Mahy is primarily focused on transactions that help the group to generate sustainable returns while reducing our dependence on fossil fuels.