Exclusive: First State nears full deployment after latest deal

The firm is planning to launch a successor fund to EDIF upon completing the acquisition of a €900m Portuguese renewables business it just announced.

First State Investments (First State), the European unit of Australia-based Colonial First State Global Asset Management (CFSGAM), will soon have spent most of the dry powder left in its European Diversified Infrastructure Fund (EDIF) after announcing the vehicle’s ninth deal last week.

A First State spokesperson told Infrastructure Investor that about 85 percent of the €2 billion fund will have been deployed following completion of the transaction, which will see the firm and an affiliate take over Portuguese-based renewable company Finerge Gestão de Projectos Energéticos (Finerge) from a subsidiary of Italian utility Enel Group for about €900 million.

Reaching the milestone will put the firm in a position to launch a successor offering, explained Philippe Taillardat, a partner at First State, in a statement. “This investment will allow us the opportunity to launch a successor fund to EDIF. We look forward to initiating this shortly.”

Finerge, which develops, builds and operates wind farms in Portugal, owns the third-largest portfolio of such assets in the country with a gross installed capacity of 863 megawatts (MW). Its revenues are supported by an inflation-linked feed-in-tariff regime with a weighted-average remaining life of 16 years.

Part of Finerge’s assets are held through a 35.96 percent stake in ENEOP – Eólicas de Portugal (ENEOP), a local company that owns operating wind farms with a total installed capacity of 1,333MW.

ENEOP’s shareholders are currently in the process of separating the assets of the business, upon which Finerge will become the sole owner of four special purpose companies owning a 445MW portfolio of wind farms.

Its acquisition by EDIF and Colonial First State Active Infrastructure Income Fund, another vehicle managed by CFSGAM, remains subject to conclusion of the transaction. The company posted revenues and EBITDA of €106 million and €90 million respectively last year, taking into account the effects of the separation process.

Launched in 2007 as an open-ended vehicle, EDIF then shifted to a hybrid structure in 2009, raising capital from institutional investors in successive “series”. The Fund’s Series Five, closed in January, allowed it to reach its hard cap of €2 billion.

The firm told Infrastructure Investor at the end of last year that it was planning to invest the whole of its latest fundraising round in about 18 months.