The vehicle is Taaleri’s fifth renewables fund, although only its second to target solar investments in addition to wind. It is also substantially larger than Taaleri’s previous funds, which have all raised below €100 million.
Taaleri SolarWind II has a hard-cap of €400 million and plans to close by summer 2020, a spokesman for the company told Infrastructure Investor, adding that the firm can fundraise for up to 18 months from the first close.
Investors in the first close include Finnish institutional investors Ilmarinen Mutual Pension Insurance Company and Varma Mutual Pension Insurance Company, as well as smaller pension funds, family offices and endowment funds, Taaleri said. The European Investment Bank has also committed to the vehicle, investing 25 percent of the fund size at each closing, up to a maximum of €60 million.
In addition, “a significant number of Finnish and international investors [are] in active due diligence” on investment into the fund, Taaleri added.
The fund will largely invest in ready-to-build assets in Europe, although 20 percent of the fund is reserved for investments in the US. Taaleri Energia secured its first US transaction in February last year, acquiring a 277MW project in Texas.
The fund plans to generate 850MW of total capacity from its portfolio, investing equity ticket sizes of between €20 million and €50 million, while for larger transactions it aims to introduce co-investment capital or team up with strategic partners.
Two investments have already been approved by the investment committee, Taaleri said. The firm’s spokesman added that the fund seeks control or joint control in all its investments, while aiming for a net return of 9 percent.
“Leverage is determined by a number of factors which will vary for each investment,” the spokesman said. “Factors such as the offtake contract term and counter-party, whether the investment is in wind or PV Solar, the availability of competitive finance in the target market, etc, all have an effect on leverage. We would estimate that leverage in the fund’s investments will vary from around 35 percent to 75 percent.”
SolarWind I has completed three investments, which also include wind sites in Serbia and Sweden, and is in the process of finalising its fourth, the spokesman said.