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Ventus VCT launched

Jumping on the venture capital trust (VCT) bandwagon is Climate Change Capital, a group which provides financial services and products to organisations affected by climate change policy. The group is differentiating itself from the other generalist and AIM VCTs in the market by offering a specialist niche in investments in wind projects.

Ventus will invest in a portfolio of companies that will develop, construct and operate small on-shore UK wind projects typically consisting of between one and six wind turbines. Investments will generally be in companies developing community projects, projects initiated by specialist small scale developers, small industrial sites and small projects which are not of interest to large development companies and utilities.

The Climate Change Advisory management team consists of individuals with experience in investment management as well as specific experience in developing and investing in wind energy projects in the UK. The board of Ventus has wide experience of investment in both smaller growing companies and larger quoted companies, as well as specific investment experience in UK wind projects. One of the directors is Alan Moore, former managing director of National Wind Power (now npower Renewables) and the current chairman of the British Wind Energy Association.

Ventus is seeking to raise £25m. Assuming that the maximum amount of £25m is raised, the fund should be able to invest in companies developing projects with a combined capacity of 70 to 80 megawatts of electricity generation. This amount of wind energy generation capacity will normally produce enough electricity to meet the annual needs of approximately 40,000 homes and will offset the annual release into the atmosphere of over 100,000 tonnes of carbon dioxide (the main greenhouse gas contributing to global warming and climate change).

Brewin Dolphin Tax Solutions, part of Brewin Dolphin Securities, is marketing adviser in relation to the offering. Once Ventus is fully invested and its portfolio companies are operating at projected capacity, the fund’s objective, on the basis of the assumptions set forth in its prospectus, will be to pay an average annual tax-free dividend of 8 pence per Ordinary Share until at least 2016, although the directors anticipate that the level of tax-free dividends may fluctuate between 6 pence and 10 pence.

The team has developed a cost-effective financing package applicable to small wind projects which it believes will be attractive to communities and to developers of such projects. Companies in which Ventus invests will benefit from long-term power purchase agreements (PPAs) for the sale of electricity, at an agreed price, pursuant to an existing framework PPA facility backed by a major UK electricity supply company, thus mitigating the risk of changes in the future price of renewable energy.