Diode Ventures, a wholly-owned subsidiary of EPC firm Black & Veatch, has partnered with Alma Global Infrastructure and Energy Innovation Partners to launch a new platform that will invest in renewables and clean energy projects primarily in OECD countries.
The platform, which initially plans on investing $200 million, has already secured half of that amount from a Korean investment bank, Heejun Park, president and chief executive of Energy Innovation Partners, told Infrastructure Investor.
The additional $100 million, he said, will be raised by AGI, a New York-based infrastructure investment firm, headed by Frederic Brassard, a former vice-president of Axium Infrastructure.
According to Park, the Korean investment bank is aiming to sell down its share of the assets acquired through the platform to domestic institutional investors. “Several Korean investors have asked to create an investment platform focused on the energy and infrastructure market,” he said.
The platform’s seed project is a nearly 50MW shovel-ready solar project that will power southern Japan under a 20-year feed-in-tariff scheme, the three firms said in a statement.
The vehicle will invest $40 million of equity in the project, a source familiar with the matter said. According to the source, the investors agreed to invest in a greenfield project because the construction risks are being fully assumed by the project developer, who is also the seller, whom the source declined to name.
The source said two to three more projects will be added to the platform in the next three to four months, with a ticket size of between $50 million and $100 million.
Park said returns on investments are expected to be in the mid-teens.
According to the statement, the partnership aims to create a diversified portfolio of long-term contracted or rate-regulated assets, by investing in small, medium and large-scale infrastructure projects in OECD countries. While the initial $200 million will support a pipeline of renewables projects, it is unclear whether future investments will be made in other infrastructure sub-sectors.
While Seoul-based Energy Innovation Partners focuses on the US power generation, shale gas and the energy midstream space, Alma Global Infrastructure and Diode Ventures target a broader range of sub-sectors. AGI specialises in establishing investment platforms in partnership with developers in core transportation, energy, water/waste management and social infrastructure assets, primarily in the US and OECD countries, according to its website.
Diode Ventures, a Kansas-based asset developer, focuses on clean energy technologies; specialised infrastructure, such as data centres; and “food infrastructure” (indoor agriculture and aquaculture).