Foresight and VEI exit Italian solar JV for €336m

The two firms are planning a second offering following the sale to ERG. The new venture will be partly financed through recycling some of the sale capital, but will also tap the market for fundraising proceeds in excess of €100m.

Foresight Group and its Italian investment firm partner VEI Green have sold their Italian solar vehicle in a deal worth an enterprise value of €336 million.

The pair sold ForVEI to Italian power operator ERG, providing the company with a portfolio of 30 projects with a total capacity of 90MW. The portfolio has been built up since 2011, when the joint venture was formed and ForVEI has since become the ninth largest solar power owner in Italy.

The ForVEI consortium originally comprised CDC Infrastructure, Quercus and Adenium in addition to Foresight and VEI, although the trio have since sold their stakes. The vehicle achieved Foresight’s targeted mid-teen returns, according to Foresight partner Federico Giannandrea, despite operating in difficult regulatory circumstances.

“This transaction represents the first sizeable exit by Foresight of its solar investments in southern Europe, testifying to the quality of the joint Foresight and VEI Green asset management in selecting, operating and financially optimising top-tier assets which fully offset the 2014 Italian subsidy cuts,” he said.

The pair are now planning a second vintage of ForVEI and are already examining a potential pipeline. The new venture will be partly financed through recycling some of the sale capital, while Giannandrea told Infrastructure Investor they will also be fundraising for proceeds in excess of €100 million.

Giannandrea added that the current ownership structure of 60 percent held by VEI Green and 40 percent by Foresight is expected to move to equal partners for the second instalment.