Category: News

London – Quercus Assets Selection SICAV-SIF SCA (Quercus) announces its participation in the real estate fund reserved for institutional investors “Star One”, an investment vehicle promoted and managed by Polis Fondi SGR (Polis). The fund is characterized by an investment policy focused on investing exclusively in operative and grid connected photovoltaic plants that provide stable and predictable cash flows, along with a possible further upside driven by a refinancing during the life of the plant and / or early exit. The Target Return (IRR) of the fund is circa 13%.

The Fund, which completed the first closing on the 8th of August, has already made its first investment by acquiring a plant of 5MW owned by Quercus located in Spinazzola (BAT). The target size of the Fund’s portfolio is about 50 MW, possibly increased up to 100MW. In order to achieve the rapid execution of the aforementioned objectives, Quercus and Polis have also agreed the option to purchase additional power plants of approximately 8MW output.

Simone Borla, Managing Partner of Quercus stated: “We are delighted to have made this first important deal that represents a very important strategic step to Quercus, allowing us to improve the performance of the Spinazzola plant, while at the same time freeing equity and paving the way for future operations which will create, with the help of other institutional investors, a portfolio of scalable size.”

Paolo Berlanda, Managing Director of Polis added: “The solar PV market still provides many attractive investment opportunities, largely fuelled by the sales of developers and private equity funds who had previously invested; the purchase of connected power plants greatly reduces the risk related to changes in the system of incentives. Star One, offering an attractive return profile over the medium to long term, is a product that provides high target returns with contained risk levels.”

For the selection of the fund’s investments and structuring of its operations Polis will co-operate with Cassiopea Partners.

Stefano Trentino, founder and CEO of Cassiopea Partners, commented: “This transaction will enable Polis to create a platform of great appeal to Italian institutional investors whose purpose is to obtain an average return of more than 13% per year through the acquisition of an already identified pipeline of connected power plants available on the secondary market.”

London – Quercus Assets Selection (Quercus) is delighted to announce that Quercus Renewable Energy Fund II has committed £2 million into a newly formed Special Purpose Vehicle (SPV), TEG Biogas (London) Limited, to allow for the construction and operation of a new 50,000 tonnes per annum food and green waste processing plant.

The £21m plant is to be constructed by The TEG Group Plc (TEG), the organic waste specialists, on a 4.7 acre site on the Mayor of London’s 60 acre London Sustainable Industries Park (LSIP). The Mayor has committed over £10m for infrastructure development on this site, which the TEG scheme will be the first to benefit from.

Quercus Assets Selection has provided £2m and matched this on pari passu terms with £2m investment from the Foresight managed UK Waste Resources and Energy Investments Fund on behalf of UK Green Investments (UKGI). Foresight Environmental Fund (FEF) and the London Green Fund (LGF) alongside other UK Pension Funds, committed £9 million to the project, to provide a total of £13m of equity. The LGF was launched in March 2011 by the Mayor of London, Boris Johnson as part of London’s drive to encourage investment into waste and energy efficiency infrastructure to create economic growth and jobs.

Alongside the equity investment, senior debt of £4.4m is being provided with a £1.9 million investment by London Waste and Recycling Board (LWARB). A further £3.5 million loan is to be provided by Investec.

This new state of the art processing plant will include the first joint Anaerobic Digestion (AD) plant to be built within the M25, alongside an in-vessel composting (IVC) plant, and should be fully operational by the second half of 2013.
The Dagenham facility will be capable of processing 30,000 tonnes of source segregated food waste and 19,000 tonnes of mixed food and green waste every year. This will be the first AD plant in central London and will generate approximately 1.4MW of electricity, sufficient to power approximately 2,000 homes. It will also produce 36,000 tonnes per annum in AD digestate and 14,000 tonne per annum of compost for agricultural use.

Diego Biasi, Partner at Quercus Assets Selection SCA SICAV-SIF, stated: “Quercus is delighted to have reached an agreement to invest alongside the UK government represented by UKGI and to have closed this first deal effectively. We are confident that this will be the first of a series of successful investments together with UKGI.”

Simone Borla, Partner at Quercus Assets Selection SCA SICAV-SIF added: “We are very pleased to be working in partnership with Foresight and the UKGI to secure a sustainable, long term solution that will divert away some 38,000 tonnes of waste a year which would otherwise go to landfill. This flagship facility will not only create new jobs but will also reduce CO2 emissions by 75,000 tonnes per year, contributing to an ever ‘greener’ London for many years to come.”

The Mayor of London, Boris Johnson, said: “This £21million investment into Dagenham is fantastic news providing new employment opportunities. TEG is also the first to start building at our new industrial park, which I have committed £10million to transform from brownfield land into an attractive space for businesses. We want the London Sustainable Industries Park to become a magnet for energy and environmental enterprises to support hundreds of new jobs. ‘It is also good news that TEG becomes London’s first anaerobic digestion plant providing an innovative, environmentally friendly way to manage the city’s waste, helping to cut down on costly landfill. Through the London Green Fund and Foresight, my team has worked closely with TEG to secure the finance for this plant and we are set to support more facilities of this nature across the capital working with boroughs and the London Waste and Recycling Board.”

Business Secretary, Vince Cable, said: “This project represents the first waste investment in the run up to the establishment of the UK Green Investment Bank and sends a clear message to the market and to potential co-investors that we are committed to investing in the UK‟s green infrastructure.”

Nigel Aitchison, Partner at Foresight Group commented: “We have been working with TEG for several months on this project which will see 50,000 tonnes of organic waste matter from Greater London diverted from landfill every year, and will enable householders to have their organic waste put to good use. This investment is the second made by Foresight Environmental Fund, and the first made by UKGI and we are looking forward to making further investments, to drive both growth and job creation in this important sector in Greater London and across the UK in the near future”.

Michael Fishwick, CEO of TEG Group added: “One of the advantages of a combined AD and IVC plant is the front-end flexibility on feedstock enabling us to process a wide variety of waste streams including food waste only, green waste only or co-mingled organic waste. On top of this we will be generating renewable power that will feed into the national grid. We will be using our award winning IVC technology which is proven in the UK combined with best of breed European AD technology, manufactured in the UK. At TEG we are committed to making a significant contribution to London becoming a model European city for recycling”.

London – Quercus is pleased to announce that CDC Infrastructure (CDC) has taken a 24% stake in ForVEI, the joint venture between VEI Capital and Luxco 2 (which includes Quercus Assets Selection and the recently announced JV between Adenium and Foresight).

Agreement in principle has been signed and is now subject to approval of the transaction by the European Commission. It is expected that completion will take place in August 2012.

Following completion, the majority shareholder will remain VEI Capital with 52%, while CDC Infrastructure and Luxco 2 will retain a 24% stake each; the total equity committed in ForVEI by the various shareholders now stands at €37 million.

Simone Borla, Managing Partner at Quercus, declared: “We are very pleased that CDC Infrastructure joined us in this rapidly growing joint-venture. This will give us additional ammunitions to further grow our portfolio of PV plants”.

The current portfolio of ForVEI comprises solar generation assets for a total installed power capacity of c. 30 MW in aggregate; the multishareholders vehicle, advised by Foresight Group, is now targeting 100MW of Solar PV assets in Italy, and this development is a significant step in progressing towards this ambition.

Diego Biasi, co-founder and Managing Partner of Quercus added: “This investment by CDC is a proof that we are creating an asset whose value is appreciated by the market”.

ForVEI recently signed a sale and purchase agreement for the acquisition of additional 8MW in the Lazio Region from Aleph Solaria; the closing of this acquisition, which remain subject to certain conditions precedent – including bank waivers, is expected to take place by the end July 2012.

Luxembourg – Quercus Assets Selection Sarl, the Luxembourg based management company of the Quercus Renewable Energy Fund, a leading investor in the Italian photovoltaic market, has entered into a joint venture agreement with UK based Foresight Group to boost its investments in the sector.

Quercus acquired a 50% stake in Foresights’s Luxembourg holding Foresight Lux Co 2, a company controlling 40% of ForVEI, a company set up by a group of investors with the advice of Foresight looking to acquire interests in Italian PV plants. The remaining 60 percent comes from VEI Capital, itself a venture between Palladio Finanziaria SpA, Assicurazioni Generali SpA (G), Intesa Sanpaolo, Veneto Banca SpA and Banca Popolare di Vicenza Scrl. Immediately after the closing of the transaction between Quercus and Foresight, the ForVEI venture acquired three Italian solar plants with total capacity of 13 megawatts from Spain’s OPDE Group.

The 55 million-euro ($75 million) deal is the largest lease-financing arranged by a single bank for a solar deal in Italy. Two units of Milan-based Intesa Sanpaolo SpA (ISP) will own the solar parks for 18 years while ForVEI pays a monthly lease and earns guaranteed above-market rates for the power generated. The three plants have expected returns of 12 percent to 15 percent. Italy has been the world’s most active solar market this year, connecting 6.5 gigawatts in solar photovoltaic projects, or three times more than Germany, to reach a total of 10 gigawatts, according to its renewable energy regulator, GSE. Even with the tariff cuts, Italy has one of the highest feed-in tariffs in Europe. Feed-in tariffs, or FITs, are guaranteed above-market prices paid for electricity from renewable sources. Under ForVEI’s agreement with OPDE, the venture might buy additional 20 megawatts of Italian solar farms developed by the Spanish company by the end of October.

Pietro Zerauschek, partner of Foresight Group and Head of its Italian solar team said: “We are extremely satisfied that an agreement was reached with Quercus thus allowing the venture to further increase its capacity to purchase first quality solar plants in the Italian market. Size matters and we are confident that with the help of Quercus’ first class investment team we will be able to identify and acquire additional attractive projects”.

Quercus has also selected Foresight as its advisor in the acquisition and construction of Latina based8MW solar farm that was successfully connected to the grid on 31st August 2011.

Diego Biasi, Founding Partner and Portfolio Manager declared: “We are excited to have entered into a joint venture agreement with Foresight to expand our portfolios of investments in Italy by accessing first quality projects offering attractive returns to our investors”.

Simone Borla, Founding Partner, said that “the partnership with Foresight is a dramatic opportunity to enlarge the scope of our Private Equity investments beyond Italy to potentially include other opportunities like investments in the UK Biomass market”.