EBRD sets up new energy equity fund
Azerbaijan, Baku Sept. 16 / Trend A.Badalova /
The EBRD (European Bank of Reconstruction and Development) is making a €40 million equity contribution to establish the Clean Energy Transition Fund (CETF) which has a target size of €200 million, the bank reported.
The setting up of a new fund will expand the capacity of Turkey and neighbouring countries in the Western Balkans and the Caucasus to tap into cleaner energy resources.
A specific feature of the Fund is that it will increase the availability of much-needed equity capital and thus expand the market to meet the growing investment needs in energy projects in the region.
"The EBRD's region of operations is rich in clean energy resources, but they remain largely unused, Alain Pilloux, EBRD Managing Director for Industry, Commerce and Agribusiness said. With our support, we will provide private developers of energy projects with capital and expertise to implement power projects in line with the governments' ambitious clean energy targets".
The Fund will support clean energy projects focusing on hydro, wind, geothermal, biomass and solar power. It will also provide financing for clean generation, energy efficiency equipment and service suppliers.
Riccardo Puliti, EBRD Managing Director for Energy said that this is a transaction that builds on the experience developed via direct EBRD investments and financings in clean energy projects in the region.
'We are establishing CETF as a catalyst vehicle that will help build long-term assets with stable cash flows. These assets will become increasingly attractive for financial and strategic investors in the coming years, given the volatility in financial markets", Aygen Yayikoglu, Founder and Managing Director of Crescent Capital, said.
The Fund will seek to make 10-15 equity investments with individual investment ranging from €5 million up to €30 million, while at least 70 per cent of its operations will be performed in Turkey, with the remaining 30 per cent in the Western Balkans and the Caucasus, the report says.
Of the 161 projects the Bank funded in the first six months of 2011, 44 came under the EBRD's Sustainable Energy Initiative (SEI), a programme that includes development of renewable energy sources, as well as energy efficiency improvements to reduce waste and harmful greenhouse gas emissions. These 44 projects stretched over 19 countries ranging from Poland to Tajikistan.
The EBRD's energy efficiency and climate change-related investments reached €1.2 billion, a rise of almost 50 per cent from the same period in 2010.
Since its launch in 2006, SEI financing reached €7.3 billion through nearly 400 projects across 29 countries.