Commerz Real begins build-out of new €500m renewables fund

The vehicle is the Commerzbank subsidiary’s second in a series, although this time has wider European mandate than only Germany.

German asset manager Commerz Real is looking to raise €500 million for its latest renewable energy fund.

The Commerzbank subsidiary is raising the funds for its Commerz Real Institutional Renewable Energies Fund II, which this week acquired the 17.25MW Parchim V wind farm in Germany from developer UKA. Parchim V is the second asset in the fund following Commerz Real’s debut offshore wind investment earlier thus year, leading a consortium to buy the 402MW Veja Nate site in Germany from Copenhagen Infrastructure Partners in a deal worth about €2.3 billion, including debt.

The fund follows on from the €300 million, 2017-vintage renewables vehicle and is predominantly focused on operational assets. Construction of Parchim V was completed in 2016 and UKA said the facility has a remaining useful life of 23 years.

Commerz Real and UKA have partnered before. The German asset manager acquired four wind farms in Brandenburg from UKB, a UKA subsidiary, through its first Institutional Renewable Energies Fund.

A Commerz Real spokesman told Infrastructure Investor it had initiated a slight shift in strategy for its latest fund by targeting assets in Europe more broadly, with up to 25 percent allocated for other OECD markets.

There is significant uncertainty in Commerz Real’s domestic market, with ongoing concerns around the German onshore wind industry. Installations have plummeted in the past couple of years, with just 287MW installed in the first half of 2019, according to Commerzbank.

The situation, which has been described as a crisis by the German wind industry, has been attributed to permit issues delaying projects and the shift to a tender system. These two factors have left many of the approved facilities unable to secure bank financing.

Commerz Real’s strategy has also been extended to target offshore wind and other “selected opportunistic” renewable energy projects.