Despite an overall gloomy outlook for the renewable energy sector across Europe, with the possibility of taxes and withdrawal of subsidies, at least some private investors are looking to keep up the investment in the sector.
Quercus Assets Selection, a private equity fund, announced that it will launch two funds focused at solar and wind energy assets in Italy. The Quercus Italian PV fund and Quercus Italian Wind fund have been launched with a target to raise €150 million each to develop assets in Italy.
Quercus had recently launched the Quercus European Renewables fund which focuses on the development of renewable energy projects across Europe. Quercus Assets Selection plans to raise a total of €500 million through there 3 funds.
The funds will have a long-term investment horizon of a minimum of 10 years and a targeted Internal Rate of Return (IRR) per annum of 8-10%, rising to 9-11% in the case of Quercus Italian Wind fund. The company plans to use the proceeds from the wind energy fund to invest in or develop assets of up to 300 MW capacity.
According to Quercus, “investment in renewable infrastructure provides stable, long-term returns with a low risk profile that generates sustainable and predictable cash flows de-correlated from the fluctuations of financial markets.” Thus, the sector offers a low-risk, long-term investment opportunity for institutional investors.
Quercus justified the geographical specificity of the funds stating that Italy has a “stable policy with regard to incentives and its focus on renewable sources which are given grid priority.” The Italian market is the fourth largest in the world for installed PV capacity (18.3 GW) and 9th for wind power (8.7 GW).
Quercus owns several renewable energy assets across Europe, including ones in the United Kingdom, Romania, Bulgaria, and Italy,
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