Asset managers eye Spain’s energy sector

Asset managers are giving Spain another look in search of investments opportunities in the country’s renewable energy sector in spite of the current eurozone turmoil, according to fund managers and Spanish press reports.

The Foresight group, Munich Re, Kohlberg Kravis & Roberts (KKR) and Natixis are among the firms reported to have shown interest in the past couple of months.

Humberto Santillana, head of Foresight’s Madrid office, said there has been a rise in activity from potential investors, including institutional investors.  “Funds are starting to be more active. In the past two months I’ve seen more players getting involved,” he said in a telephone interview.

Foresight assets in Spain already include two photovoltaic power plants worth about €140m. It is now looking at possible new investments in the photovoltaic sector, environmental infrastructure and biomass.

Investment in these areas had come to a standstill after the government capped electricity prices at the end of last year. No further rule changes are expected and the threat of new legislation has been lifted with the announcement of a general election in November. “People can be more comfortable with the regulatory framework,” Santillana said.

Expansión, the Spanish business daily newspaper, suggested there was a surge in interest as international investors looked to snap up bargains in the renewable energy sector. Santillana cautioned that it is necessary to see the transactions actually being closed to determine whether that is really the case.

MEAG, the asset manager of Munich Re, is among companies that have recently closed deals in the sector. Last month it purchased a 37% stake of a diversified portfolio of 34 solar parks in Spain and eight in Italy from Grupo T-Solar, one of the leading European developers of photovoltaic plants.

In addition to Munich Re, the KKR Infrastructure Fund has also purchased a 12% share of the portfolio.
Munich Re’s investment is part of its renewable energy and new technologies (RENT) programme through which the company intends to invest up to €2.5bn in renewable energies and new technologies in the coming years.

“With RENT we are adding sustainable investments to our investment portfolio with a calculable risk and attractive returns,” said Dieter Wolf, MEAG Managing Director in charge of portfolio management.

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