CGNPE, JIDA Capital to launch $1bn renewables fund in Q3

Once fundraising kicks off, CGN’s private equity arm and the infra-focused investment firm will look to divest the portfolio of their first renewables vehicle, the 2015-vintage CGN Capital Partners Infrastructure Fund III.

Hong Kong-based JIDA Capital Partners and CGN Private Equity Fund Management (CGNPE), are preparing to launch a $1 billion renewables-focused fund this summer, Raymond Fung, founding partner and chief investment officer at JIDA Capital, told Infrastructure Investor.

“We are hoping to raise around 40 percent of the capital from international investors,” he said. Fung added that China General Nuclear Power Corporation, one of China’s largest clean energy power generators and CGNPE’s parent, would be an anchor investor, alongside hydropower firm China Three Gorges, in CGN Capital Partners Infrastructure Fund IV. A first close is expected before the end of 2019.

The vehicle marks the second time CGNPE and JIDA Capital, which is owned by its management team and New Zealand investment manager HRL Morrison & Co, have cooperated in raising a renewables fund. Fung said it would invest 60 to 80 percent of its portfolio in solar and onshore wind projects, 10 to 30 percent in data centres and 10 to 20 percent in other energy-related projects.

He added that having CGN as a partner provided the vehicle with insight into the renewables market and the ongoing changes in the country’s regulatory environment.

Fund III’s portfolio comprises 940 MW of renewables assets. However, Fung said he expected another 100MW to 200MW to be added “in the next few months” and that the portfolio’s final value could reach $1.7 billion to $1.8 billion.

He said the vehicle, which was launched in 2015 and for which he acts as chief investment officer, could achieve 20 percent net returns for its investors and gross returns of more than 30 percent.

“JIDA believes that there won’t be a shortage of prospective buyers,” he said, “as China is still quite a closed market for most investors.”

The vehicle closed its fundraising at 3.69 billion yuan ($534.4 million; €478.4 million) in June 2017. According to previous statements, the LPs that have committed to it include China Three Gorges, Industrial and Commercial Bank of China, Agricultural Bank of China, Postal Savings Bank of China, China Cinda Asset Management, China Huarong Asset Management, the People’s Insurance Company of China and a “UK listed global utility”.