Acquisition of a Development Platform
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13 February 2024
The Renewables Infrastructure Group Limited
"TRIG" or "the Company", a London-listed investment company advised by InfraRed Capital Partners ("InfraRed") as Investment Manager and Renewable Energy Systems ("RES") as Operations Manager.
Acquisition of a development platform
· TRIG has acquired 100% equity interest in Fig Power, a UK-based developer focused on battery storage
· Acquisition furthers TRIG's technological diversification and bolsters TRIG's development pipeline with 400MW of advanced stage battery storage projects
· Fig Power's management team brings extensive industry experience, has a proven track record of success in the energy sector, and will benefit from the expertise of TRIG's Managers
TRIG has acquired a 100% equity interest in Fig Power, an energy projects developer based in Bristol, formerly a sister company of Hydrock Consultants Limited. The expected outlay over the next two years is c. £20m - approximately half for the upfront consideration and half relating to ongoing development expenditure. Thereafter, Fig Power is projected to be self-funding from the proceeds of selling a portion of its pipeline once developed and prior to construction. Funding of the business plan will be subject to annual budget reviews and at the discretion of TRIG.
Fig Power has a 1.7GW development pipeline in the UK, including nine more advanced projects (c. 400MW with grid offers ranging from 2025 to 2033) and a further c. 1.3GW of exclusive sites. Fig Power's two-hour projects are expected to participate principally in the UK wholesale and balancing markets. The investment case for the individual projects Fig Power is developing are not expected to be dependent on the ancillary services market, which is shallower than the wholesale and balancing markets.
In addition to securing a pipeline of projects for TRIG to build, the Investment Manager anticipates opportunities to sell developed projects to third parties and crystallise development value for TRIG. Fig Power may also consider development opportunities in solar PV.
Prudent capital allocation remains a priority for TRIG. Alongside making investments such as Fig Power, the Company is at an advanced stage on divestment activities. Proceeds from these divestments are expected to be applied to reducing RCF borrowings, which were £364m at 31 December 2023.
Richard Crawford, Head of Energy Income Funds at InfraRed Capital Partners, said:
"Flexible capacity, of which battery storage is a key component, is core to the energy transition and important to the rollout of renewables. Batteries, therefore, represent an important investment sector for TRIG, providing diversifying and often complementary revenues to the portfolio.
Adding development capabilities within TRIG's investment portfolio creates the opportunity to capture higher returns for shareholders and generate a proprietary pipeline through a team that is closely aligned with TRIG's objectives. Fig Power will leverage the development experience of TRIG's Managers. InfraRed has a strong track record of investing in flexible energy platforms for over a decade, most recently in Statera Energy. RES has been a pioneer in UK battery storage.
Fig Power also builds on the four development-stage battery investments that TRIG added in 2022. Preliminary construction works on the first of these projects began in January 2024 and we expect to start groundworks on the second project in H2 2024."
Enquiries
InfraRed Capital Partners Limited +44 (0) 20 7484 1800
Richard Crawford
Phil George
Minesh Shah
Mohammed Zaheer
Brunswick +44 (0) 20 7404 5959 / TRIG@brunswickgroup.com
Mara James
Investec Bank Plc +44 (0) 20 7597 4000
Lucy Lewis
Tom Skinner
BNP Paribas +44 (0) 20 7595 9444
Virginia Khoo
Carwyn Evans
Notes
The Company
The Renewables Infrastructure Group ("TRIG" or the "Company") is a leading London-listed renewable energy infrastructure investment company. The Company seeks to provide shareholders with an attractive long-term, income-based return with a positive correlation to inflation by focusing on strong cash generation across a diversified portfolio of predominantly operating projects.
TRIG is invested in a portfolio of wind, solar and battery storage projects across six countries in Europe with aggregate net generating capacity of over 2.8GW; enough renewable power for 1.9 million homes and to avoid over 2.4 million tonnes of carbon emissions per annum. TRIG is seeking further suitable investment opportunities which fit its stated Investment Policy.
Further details can be found on TRIG's website at www.trig-ltd.com.
Investment Manager
InfraRed Capital Partners is an international infrastructure investment manager, with more than 170 professionals operating worldwide from offices in London, New York, Sydney, Seoul and Madrid. Over the past 25 years, InfraRed has established itself as a developer and steward of infrastructure assets that play a role in supporting communities. InfraRed manages US$14bn of equity capital1 for investors around the globe, in listed and private funds across both core and value-add strategies.
A long-term sustainability-led mindset is integral to how InfraRed operates as it aims to achieve lasting, positive impacts and deliver on its vision of Creating Better Futures. InfraRed has been a signatory of the Principles of Responsible Investment ("PRI")2 since 2011 and has achieved the highest possible infrastructure rating for eight consecutive PRI assessments, having secured a 5-star rating for the 2023 period3. It is also a member of the Net Zero Asset Manager's Initiative and is a TCFD supporter.
InfraRed is part of SLC Management, the institutional alternatives and traditional asset management business of Sun Life. InfraRed represents the infrastructure equity arm of SLC Management, which also incorporates BGO, a global real estate investment management adviser, and Crescent Capital, a global alternative credit investment asset manager. Further details can be found on the website at www.ircp.com
[1] Uses 5-year average FX as at 30th September 2023 of GBP/USD of 1.2944; EUR/USD 1.1291. EUM is USD 13.597m
2 Principles for Responsible Investment ("PRI") ratings are based on following a set of Principles, including incorporating ESG issues into investment analysis, decision-making processes and ownership policies. More information is available at https://www.unpri.org/about-the-pri
3 In the 2023 Principles for Responsible Investment ("PRI") assessment, InfraRed achieved a 5 star rating for the Policy Governance and Strategy and Infrastructure and a 4 star rating for the newly created Confidence Building Measures. Please find InfraRed's report available for download on our website here: https://www.ircp.com/sustainability/
Operations Manager
TRIG's Operations Manager is RES ("Renewable Energy Systems"), the world's largest independent renewable energy company.
RES has been at the forefront of wind energy development for over 40 years, with the expertise to develop, engineer, construct, finance and operate projects around the globe. RES has developed or constructed onshore and offshore wind, solar, energy storage and transmission projects totalling more than 23GW in capacity. RES supports over 12GW of operational assets worldwide for a large client base. Headquartered in Hertfordshire, UK, RES is active in 11 countries and has over 2,500 employees engaged in renewables globally.
RES is an expert at optimising energy yields, with a strong focus on safety and sustainability. Further details can be found on the website at www.res-group.com.
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