London-based fund manager Zouk Capital has invested £30 million ($45 million; €42 million) in Glasgow’s UrbanWind, a renewable energy firm that helps develop wind power for landowners, farmers, agribusinesses and community groups.
The £30 million investment is coming out of Zouk’s second renewables infrastructure fund, which closed last September on €220 million. Through a new joint venture called Urban Wind Assets, Zouk will provide equity to help fund wind schemes that have made it through the planning process, but lack the necessary funds to get built.
All of the projects developed will benefit from the UK government’s feed-in-tariff (FiT) scheme, a fixed and index-linked subsidy for projects of up to 5MW. According to advisory Carbon Trust, FiTs often offer higher returns than the outgoing Renewable Obligation Certificate framework, which applies to large-scale renewables projects, of between 5 percent and 8 percent.
UrbanWind currently has a pipeline of 100 sites under appraisal, including consented sites, being evaluated for potential investment. The firm is looking to acquire more consented sites across the UK.
“Our partnership with UrbanWind offers us an exciting opportunity in onshore wind and fits our fund’s capital strategy well,” commented Zouk Capital managing partner Colin Campbell.
The UK onshore wind industry faces an uncertain future after the Conservative Party pledged to “halt the spread of onshore wind farms” by cutting “any new public subsidy for them and [changing] the law so that local people have the final say on wind farm applications”.
Zouk recently invested in the £111 million Levenseat Renewable Energy energy-from-waste plant and adjacent Materials Recycling Facility (MRF) at By Forth near Lanark, in Scotland. The fund manager invested alongside the Green Investment Bank and Foresight Group.
This article was first published on Low Carbon Energy Investor.