To enable medium-sized as well as smaller institutional investors to invest in hydropower, owner-managed RENAIO launched the first open infrastructure fund for hydropower. With this alternative fund, the Augsburg-based company wants to make investments in renewable energies accessible to a broader group. For its evaluation and asset management of hydropower plants, the company relies on the finance software by greenmatch.
Hydropower fund for medium-sized and smaller investors
In March 2019, RENAIO Assets GmbH introduced the sustainable investment fund together with the private bank Hauck & Aufhäuser. “The shift towards a clean, resource-friendly and decentralized energy supply is our driving force”, stated the asset and portfolio managers from Germany. The RENAIO infrastructure fund (RENAIO Infrastrukturfonds S.C.A., SICAV-RAIF) supports the energy revolution: It provides institutional investors with the opportunity to invest in small and medium-sized hydropower plants and thus do their share in climate protection. RENAIO emphasizes that in doing so, not only will sustainable returns be generated, but also a contribution made to solving the CO2 problem.
The company is thus responding to the market’s demand for sustainable forms of investment. The investments will flow into existing hydropower plants with an output of between 200 kW and 5 MW and an expected return of at least 6 % p.a. Launched in Luxembourg, the fund invests throughout Europe with a focus on the Alps, Scandinavia and Poland. The portfolio includes two hydropower plants in the Udine / Friuli Venezia Giulia region in Italy with an investment volume of around EUR 5.6 million. Furthermore, the purchase of a hydroelectric power plant in Poland is under due diligence.
Hydropower plants valuation and fund price calculation
The greenmatch software serves as an instrument for the ongoing financial valuation of hydropower plants:
- On acquisition: RENAIO uses greenmatch’s cash flow model to calculate the profitability of an investment in the transaction process. In addition, various scenarios are modelled with the valuation software in order to simulate varying assumptions for production (p-value), electricity price developments or plant running times.
- In ongoing operation: As for the quarterly fund price calculations, the value of the hydroelectric plants is established by using the greenmatch Asset Controlling tool. Thereby, the simulation models reliably identify possible deviations from the plan, so that necessary measures can be taken transparently and at short notice.
By using a web-based finance software, RENAIO is breaking new ground in the structuring of open infrastructure investments. More precisely, the greenmatch software enables RENAIO to continuously monitor and implement the growth targets that have been set. This gives investors maximum transparency with regard to the fund and its return potential. Besides, the company can use the greenmatch tools to make more precise distribution forecasts and increase the profitability of the hydropower plants in a targeted manner.
Authors
Andreas Grassl is Managing Director of RENAIO Assets GmbH
Christian Heimann is Partner at RENAIO Assets GmbH
About RENAIO
To date, RENAIO Assets GmbH has taken charge of projects worth around EUR 270 million. That is, more than 40 power plants with a total capacity of over 55 MW have been checked, evaluated and guided through the investment process. The experienced asset managers and long-serving fund specialists know the needs of institutional investors.
