Allianz in first US renewables deal

The German insurer's alternatives unit has backed two wind parks in New Mexico, the first of several investments it intends to make in the US renewables sector in the near to medium term.

Allianz Capital Partners (ACP), the alternative asset investment arm of German insurer Allianz, has made its first foray in the US renewables sector by investing in two adjacent wind parks located in New Mexico’s Roosevelt County.

The transaction is not only the first for ACP’s renewables platform in the US but also the first time the firm is entering a joint venture. Bank of America Merrill Lynch is providing around 60 percent of the total tax equity, while Allianz is providing the remainder.

“This investment is a significant first step for us in the US market, and with the renewal of the Production Tax Credit (PTC) legislation, we hope to be making further investments in the near and medium term,” ACP’s head of renewables David Jones said in a statement.

The Roosevelt and Milo wind farms, which have a combined capacity of around 300 megawatts (MW), are operational and can power about 175,000 households. They were both developed by EDF Renewable Energy.

Comparing the European and US wind sectors, Jones said that one key difference is that individual project sizes in the US tend to be larger than in Europe.

“This is appealing to large investors such as Allianz as roughly the same amount of resources, in terms of time and due diligence expenses, are required to invest in larger projects as in smaller projects – so there are some economies of scale in the investment process.”

Allianz’ renewables portfolio now comprises 60 wind farms and seven solar parks in France, Germany, Italy, Sweden, Austria, Finland and the US. This latest transaction takes its total equity investments in the sector to more than $3 billion.

In addition to clean energy, ACP also invests in infrastructure and private equity. It currently manages around €14 billion of alternative assets.