Aviva buys Spanish wind farm to counter low bond yields

Aviva Investors and Germany’s SachsenFonds have bought the 49.4MW Almatret wind farm in Lerida, Spain from Element Power. The insurer was recently involved in the ‘UK’s largest residential solar deal’.

Aviva Investors, the asset management arm of insurance giant Aviva, together with Germany’s SachsenFonds, has bought a 49.4-megawatt (MW) wind farm in Spain, its second European renewables deal this month.

The seller was Element Power and the deal was closed for an undisclosed amount. The asset, known as the Almatret wind farm, is located in Lerida, Spain. 

Aviva Investors and SachsenFonds are partners in managing the Aviva Investors European Renewable Energy Fund, which reached a first close on €300 million about a year ago.
 
For Aviva Investors, the deal is an important milestone, taking the amount of private market infrastructure assets under management to about €500 million. Ian Berry, fund manager, infrastructure & renewable energy at Aviva Investors, also pointed out the deal will help counter low-yielding government bonds:

“We continue to execute our programme of seeking high quality, long-lived renewable energy assets with low risk and strong yield profiles. In a challenging macro-economic environment where yields remain low, especially on government bonds, institutional investors are looking for diversified sources of stable income.”

Berry praised Almatret’s “defensive investment risk profile” and left the door open for further deals with Element Power: “We look forward to working with Element Power on other investment opportunities of interest”.

Element Power is a subsidiary of private equity firm Hudson Clean Energy Partners with a presence in 12 countries and main offices in London, Madrid and Portland, Oregon. The firm has over 7,650MW of operating and development-stage wind and solar assets across Europe, the Americas and Asia, Element Power said in a statement.

The Almatret wind farm is Aviva Investors’ second European renewable deal this month, after it closed the “UK’s largest residential solar deal”. Earlier this month, Aviva Investors purchased a 23-megawatt portfolio of residential photovoltaic assets from residential solar developer HomeSun Holdings for an undisclosed amount. The assets are spread across 7,000 homes.

Aviva Investors has also been active in the infrastructure debt space having recently acquired, via one of its funds, a €200 million portfolio of project finance loans from Bank of Ireland for 81 percent of its value.

In late May, Aviva Investors’ subordinated debt fund with Hadrian’s Wall Capital reached a first close on £160 million (€202 million; $250 million). Aviva Life & Pensions UK was one of the fund’s cornerstone investors.

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