UK VCT manager seeks to triple renewable exposure

Albion Ventures, which manages £235m of venture capital trusts, has completed its first investment in the wind sector and is seeking to increase its portfolio exposure to renewable energy from 5% to 15%.

Albion Ventures, a UK venture capital firm which specialises in managing venture capital trusts (VCTs), has made its first investment in the wind sector.

The firm has invested £1.5 million (€1.7 million; $2.4 million) in partnership with Wales-based developer Infinite Energy to fund the development of a single 500-kilowatt peak (kWp) wind turbine on a brownfield site near Ebbw Vale in Wales.

The investment will create a special purpose vehicle, which will be jointly managed by Albion Ventures’ funds and Infinite Energy, and will benefit from a feed-in-tariff (FIT) regime (applicable until April 2012) which pays a fixed income to the owner of renewable energy generators plus an additional payment for surplus power exported to the national grid. The FITs apply for between 20 and 25 years.

The site in Ebbw Vale is expected to generate its first electricity in January 2012 and will generate enough clean energy to power 325 households. Most of the energy will be used on-site by tile manufacturer Redlands Monier, offsetting up to 740,000 kilograms of carbon dioxide per year.

Albion Ventures manages nine venture capital trusts, with a total of around £235 million under management. A spokesperson for the firm said the wind investment would be spread across seven of these funds, the only exceptions being the firm’s two Kings Arms Yard VCTs.

The spokesperson added that Albion is looking to increase the amount of capital committed to renewable energy from a current level of 5 percent of the total to 15 percent. It has made six investments in the space so far, with three of these in the last year – two solar photovoltaic investments and an investment in a waste-to-energy anaerobic digestion plant in Scotland.

Venture capital trusts are investment companies listed on the London Stock Exchange that were launched in 1996 to encourage private investors to support UK growth companies in exchange for tax incentives.