RES-backed firm in London IPO
The Renewables Infrastructure Group (RIG), a new investment manager backed by the UK renewables developer RES, intends to launch a £300m ($457m) initial public offering next month with the intention of snapping up operational wind and PV assets.
The IPO – seen as a reflection of the inability of stretched European utilities to buy existing renewables assets – would eclipse the £260m raised by Greencoat UK Wind when it floated on the London Stock Exchange in May.
Last month UK solar investor Bluefield Partners announced plans to raise £150m on the LSE this summer.
Like both of those investors, RIG – backed by RES and London-based infrastructure investor InfraRed Capital Partners – will use the capital raised to buy existing renewables projects.
RIG plans to use the money it raises to immediately buy 276MW of capacity, spread across 14 onshore wind farms and four PV parks in the UK, France and Ireland. In future it intends to broaden its scope to include Germany and Scandinavia.
RES, a leading developer of wind and solar projects around the globe, is committed to buying 20% of the shares in RIG – and the new company will have right of first offer over a pipeline of future RES projects.
The company is targeting annualised dividends of 6%, which will increase over the mid-term in line with inflation, and an internal rate of return in the region of 8%-9%.
InfraRed will manage RIG on a day-to-day basis with RES acting as operations manager.
“We have assembled a diversified portfolio of fully operating seed assets, which has been carefully constructed to provide a steady long-term yield whilst retaining capital value,” says Richard Crawford, director of infrastructure at InfraRed.