HgCapital beefs up in renewables

HgCapital, the European mid-market private equity firm, is continuing its buying spree in the renewable energy sector with yet another Spanish purchase.

Along with its local partners, HgCapital is acquiring a Spanish solar energy power plant – which has a maximum output of 5.25MW – from Spanish holding company Montebalito and Invercartera Energia2, an investment division of regional savings bank Caixa Catalunya.

The value of the deal was not disclosed but the business is estimated to have fetched about €34m, based on solar assets being worth on average €6.4m per megawatt-peak (MWp), depending on their revenue-generation.

Caixa Catalunya is providing the debt financing on the deal with an 18-year non-recourse loan.

This is the third renewables deal that Hg’s Renewable Power Partners Fund has made in the last two months, bringing the total amount it has invested to €550m by enterprise value in the last year.

On top of other acquisitions, Hg’s renewables fund has so far acquired 37MWp worth of solar plants in Spain from AIG, a 5MWp wind project in Wales, and the 95MWp Havsnas windfarm in Sweden.

To-date, HgCapital’s renewable portfolio is made up of 35 projects either in operation, construction or development.

“We continue to identify high quality targets and execute deals in a difficult environment,” said Tom Murley, who heads up HgCapital’s renewable energy team.

The private equity firm’s buyout fund – which invests in healthcare, TMT, services, and industrials – is now in the process of raising capital from a range of institutional investors including pension funds. According to industry sources, it has a £1.75bn target in mind and hopes to close in the next few months.

Hg’s renewables fund is separate and has increasingly become an important focus for the company.