Green CEO

Ian Simm, the newly appointed CEO of environmental finance group Impax, is taking over at a time of growing interest in renewable energy. By Jonn Elledge.

The business world generally quietens down somewhat in the summer, as staff take their holidays and plans are placed on ice until the “back to school” mentality takes over in autumn. But August was a busy month for Ian Simm: he’s just taken over as the chief executive of AIM-listed environmental financial services company Impax Group.

 

Ian Simm, chief execuitive, Impax Group

Simm joined Impax, which operates in the environmental markets sector, in 1996 following a stint as a project manager at McKinsey and Company in the Netherlands. Two years later he established the firm’s asset management arm IAM, where he was responsible for a string of listed and private equity funds invested in environmental developments in Europe, Asia and Africa. Impax is clearly pleased with IAM’s performance: not only has its managing director been promoted to head of the entire group, but it is now launching a third private equity fund.

 

Impax’s two previous unlisted funds have been relatively small affairs: the £5.5 million (€8.1 million $9.9 million) Recycling Fund, and the $25 million PVMTI, which invests in solar energy projects in India, Kenya and Morocco. Impax New Energy Investors LP will be rather larger. It has already received €60 million ($73 million) of commitments from fund sponsor Dexia Credit Local and investors including British Airways Pension Fund, Universities Superannuation Scheme, and South Yorkshire Pensions Authority. The firm is hoping to reach its target size of €125 million within the next year.

 

A typical investment for the fund would, according to Simm, be a 50 megawatt wind farm looking for €10-15 million of equity or mezzanine finance. Hydro, biomass and solar power projects are also potentially of interest. The firm expects to hold each investment for between five and ten years.

 

Impax is not the first firm to take advantage of the rising interest in renewable energy sources. Others firms, such as the London merchant bank Climate Change Capital and Zurich-based Sustainable Asset Management, also exist specifically to take advantage of the opportunities created by combining environmentalism with capitalism. More mainstream firms, such as the UK’s Englefield Capital, HgCapital and Bahrain-based Arcapita have also been getting into the wind-farm business.

 

You may notice that this sudden rush of interest in renewable energy is restricted to one side of the Atlantic. This is because its driving force is the 2001 “Renewables directive”, an EU-wide instrument that sets different targets for how much energy each country should be sourcing from renewable sources by 2010. (The UK, for example, is aiming to buy 10.4 percent of its energy from such sources by then).

 

The directive is making the sector a lot more appealing to investors, as it guarantees markets for renewable power in twenty-five European countries.

 

Simm is fully aware of the potential for his business: “The sector appeals to investors because it’s low risk, and you can sell the power produced on long term contracts. It’s also large, and growing quickly – it’s expected to reach €500 billion over the next ten years.”