The Russian Association of the Wind Power Industry has teamed up with investment agency Invest in Russia to launch a wind energy fund targeting 100 billion roubles ($1.7 billion; €1.5 billion).
The 15-year fund is seeking to finance greenfield projects in Russia with a target internal rate of return of 15 percent and will invest over seven years. A state guarantee mechanism is also slated for use in the fund.
The wind association said the market has matured in Russia to the extent that investors are unwilling to pay high prices for site search and project preparation that they can do independently, a situation it said existed in previous years “at the peak of the market in Europe”. The duo hope to lure investors from Europe with potentially high returns and quality projects, as well as establish a turbine manufacturing industry in Russia.
The new vehicle is the second of its kind to be set up in as many months in Russia – private equity sovereign wealth fund Rusnano and Finnish utility Fortum unveiled a partnership to launch a 30 billion rouble wind fund in June. The pair were awarded 1GW of wind projects in a recent auction tendering 1.6GW of capacity, which will be financed by the fund they launched.
Russia had only 11MW of wind energy capacity installed as of the end of last year, according to the International Renewable Energy Association. However, Invest in Russia said the country’s state-owned nuclear operator Rosatom sees wind power as “one of the most promising” markets within its growth strategy and predicts installed capacity could reach 3.6GW by 2024. Rosatom plans to build 610MW of projects between 2018 and 2020.