Oaktree-backed Hartree launches solar JV

The new company that currently has a pipeline exceeding 4GW of solar projects in Europe, brings together a commodities and energy trading house, an asset manager and a solar developer.

Hartree Partners, the New York-based merchant commodities firm backed by Oaktree Capital Management, has partnered with AGP Sustainable Real Assets and NaGa Solar to launch AMPYR Solar Europe, a joint venture that will develop utility-scale solar projects and associated battery storage in the UK, the Netherlands and Germany.

ASE builds on AMPYR Energy UK, a joint venture London-based asset manager AGP launched with Hartree last year, which is developing 1.5GW of onshore wind, solar PV and associated battery storage in the UK. “The UK operation will combine its solar assets with those under development in the Netherlands and Germany through NaGa,” according to a statement.

“All of the skills that Hartree has in terms of energy market analytics, trading capability, ability to manage risk… combined with the operational and technical expertise of AGP, gives us a unique combination,” Andrew Gould, a partner at AGP and ASE board chairman, said during a call, referring to the partnership the two companies formed last year. “By tying up with NaGa, we’re able to bring all of this global expertise, if you like, and apply it to local situations with local development teams,” he added, referring to the latest joint venture.

“NaGa has superb local developing skills in Germany and the Netherlands and teams on the ground; wonderful relationships with communities, with local developer partners,” Gould said of the Maastricht-based solar developer, noting that it also has a significant pipeline in those two countries.

“One of the key strengths in the three partners working together on this is that…contrary to the standard, stand-alone development company, we have an integrated proposal which includes PPA pricing and therefore an ability to improve on the bank financing of these projects,” Henny Pelsers, founder and chief executive of NaGa and a director at ASE, commented.

“That packaged together increases the value of our development portfolio substantially. That’s one of the key reasons why we think this joint venture can be very successful and have therefore higher returns than the standard development environment that NaGa has been working on over the last couple of years.”

ASE currently has a project pipeline of more than 4GW, with roughly 600MW ready to build in the coming months.

“There’s about 180 projects on our radar screen,” Gould said. “They tend to be, on average, smaller in the Netherlands. We’ve got more of a mix of rooftop [there]. In the UK, it’s all ground mount and in Germany it’s nearly all ground-mount.”

ASE may look at other markets in the future, but the UK, Germany and the Netherlands will be the markets the company will be focusing on initially.

In terms of financing, the company is funding development of its current pipeline from its own balance sheet, but according to Gould, ASE’s portfolio “is capable of sustaining investment by third parties by over €1 billion”.

“We’re looking at the most efficient way at accessing capital markets and using our own capital to accelerate that pipeline,” Gould said, noting that ASE’s current pipeline has a timescale of 18 to 24 months.

“We’ve got a lot of interesting options open to us that range from mezzanine finance to bringing third-party equity into the asset only part of the enterprise,” he said.

Raising a fund is also one of the options ASE is considering with which to bring in third-party equity capital.