Triodos Bank’s international renewable energy and climate equity investments, and its Dutch renewable energy lending activities, are the collective responsibility of a European group of more than 25 experts operating from five countries. Its aim is to maximise impact on climate change, with a clear focus on reducing demand for energy and expanding renewable energies. It also includes projects which deliver exceptional efficiency gains in decentralised natural gas applications.
Sustainability and environmental, social and financial criteria are equally important in the investment and lending decisions of the various funds under management. Triodos Bank often applies stricter criteria than others in the market because of its integrated approach. When it considers financing a project it assesses both the specific project and the related activities in the value chain. Triodos Bank also takes, and encourages, initiatives that add to the climate debate.
The total TIM investment funds renewable energy equity and loan portfolio in Europe consist of over 110 projects, with a total green power generation capacity of approximately 1,012 MW, contributing to the avoidance of over 1,182,916 tonnes of CO2 emissions per year. Of these projects, 77 are wind power projects, 19 solar photovoltaic, 13 biomass and 1 small hydro projects.
Triodos Groenfonds (The Netherlands)
Triodos Groenfonds is the largest Triodos investment fund for Dutch private investors and the first green investment fund in The Netherlands. Investors in it benefit from a Dutch tax scheme for green investment. The fund finances renewable energy, organic farming, sustainable real estate and nature conservation projects. Approximately half of the portfolio is in renewables, most of which are wind power projects. It also increasingly invests in other types of renewable energy such as biomass, solar and thermal storage. The majority of the other half is in organic farming, sustainable real estate and nature conservation sectors.
There are 77 energy projects in the portfolio, with a green power generation capacity of approximately 385 MW, contributing to a CO2 reduction of approximately 371,233 tonnes per year. At the end of 2010, 77.1% of the fund’s assets were invested in green certified projects. And it aims to increase its impact further, by diversifying the portfolio. The fund will increasingly invest in energy efficiency and other energy technologies, in addition to wind energy. The sustainable real estate fund will continue to grow, seeking to finance projects that reflect Triodos Bank’s holistic approach: such as sustainable real estate for social welfare companies, or organic farms that use renewable energy.
In 2010, the fund’s total assets decreased by 2.8% to EUR 565.4 million, delivering a return of 0.3% (excluding a tax benefit of up to 2.5% for green investment by private investors). In 2010 a new Dutch government announced it would cancel the extra fiscal discount of 1.3% by 1 January 2011, forcing the fund to temporarily close trading trade in its shares. In November parliament revised this schedule agreeing to reduce the tax benefit in small steps over four years. The fund reopened as this clarity about its future emerged. The negative effect of the temporary closure and the new tax-plan was 1.06% on the shares of the fund.
Triodos Sicav II-Triodos Renewables Europe Fund (Europe)
Triodos Sicav II-Triodos Renewables Europe Fund, registered in Luxembourg, was launched in 2006 to create an opportunity to invest in renewable energy projects throughout Europe. Private and professional investors participate in the fund, which invests in unlisted small and medium-sized renewable energy-power producers.
The fund offers complementary risk capital through equity or subordinated loans, supporting developers wanting complete finance for their projects. It is an active investor in European privately owned wind, solar and biomass power plants, and draws on Triodos Bank’s 30 years of experience in the sector. The fund is open-ended and has a long-term investment horizon.
In 2010, the fund grew to eur 50.5 million, invested in five countries and delivered an annualised return of 2.6%. It has 24 projects in its portfolio with a green power generation capacity of approximately 195 MW avoiding approximately 127,967 tonnes of CO2 per year.
Triodos Renewables Plc (UK)
Triodos Renewables plc invests in, owns and operates sustainable energy projects in the UK on behalf of private and institutional shareholders. In 2010, the portfolio of operational projects grew 40% from 23.45 MW to 32.65 MW. In addition, the company has progressed two wind projects through the planning system in Scotland and is in the construction phase of a Kessingland wind farm in Suffolk, 2km inshore from the North Sea coast. On completion of this project, Triodos Renewables’ portfolio will have a total renewable electricity generation capacity of 36.75 MW, equivalent to the energy required to power 24,500 homes.
Wern Ddu wind farm case study
Wern Ddu is another new development in the Triodos Renewables portfolio. The construction of this four turbine site in North Wales was completed early in 2010. The development delivered its first power to the grid three months ahead of schedule in March 2010, and is able to generate enough green electricity to supply the equivalent of 6,000 homes.
Kessingland wind farm case study
The Kessingland wind farm will sell power to the grid under the government feed-in tariffs scheme introduced in February 2010. Construction at the site, which adjoins the Africa Alive Wildlife Park – which is also landlord to one of the turbines – began in December 2010. Weather conditions allowing, power should be generated from the site by June 2011. Africa Alive Wildlife Park plans to set up an educational centre on site including a renewable energy display. The wind farm is the seventh project in Triodos Renewables’ portfolio, which also includes the Gulliver single turbine at Ness Point in Lowestoft, 10km north of Kessingland, as well as the Marine Current Turbines hydro-electric project and investments in other sustainable energy businesses.
Ampère Equity Fund (Europe)
Ampère Equity Fund was launched in 2007. Its shareholders are institutional investors and include some leading pension funds. Committed capital amounts to EUR 320 million, a substantial part of which is available for new investments. The fund mainly invests with equity in larger wind and solar power projects in Western Europe. It works as a co-shareholder with reputable European project developers and also takes full ownership of power plants. The fund has made nine investments in the Benelux, Germany, Spain and the United Kingdom, with a joint green power generating capacity of 503 MW, avoiding CO2 emissions of approximately 772,763 tonnes per year.
Case study – PGGM and Ampère Equity Fund buy minority stake from DONG Energy in Walney Offshore wind farm
A consortium of PGGM and Dutch Ampère Equity Fund, managed by Triodos Investment Management, have entered into an agreement with DONG Energy acquiring a 24.8% stake in the Walney Offshore wind farm. The wind farm will be built and managed by the Danish based DONG Energy, a company with a strong track-record in the industry, and has a total construction cost of approximately EUR 1.2 billion.
The project site is approximately 15km west of Barrow-in-Furness in Cumbria, in the UK. The total capacity of Walney is 367.2 MW, consisting of two equal phases (Walney 1 and Walney 2), each with 51 3.6 MW turbines. The rotor diameter of the turbines is 107m for Walney 1 and 120m for Walney 2, with a maximum height of 150m from blade tip to sea level; Walney 2 will be the first project to benefit from the new Siemens 120m turbine. The total area of the development is some 73km2.
Offshore wind is a crucial part of the renewable energy mix and an important market for the Ampère Equity Fund. This investment proves the added value of its focus on renewable energy to institutional investors in the Ampère Equity Fund. Importantly, Ampère Equity Fund worked in partnership with PGGM who is both co-investing directly in the project and an existing investor in the Ampère Equity Fund.
Triodos Renewable Energy for Development Fund
Stichting Triodos Renewable Energy for Development Fund finances regional financial intermediaries that provide funding to businesses and projects focused on renewable energy in developing countries. The fund is fully invested and, at the time of writing, is not making any new investments.
Triodos EIS Green Fund (UK)
Triodos EIS Green Fund was launched in the 2008/09 UK tax year raising GBP 1.5 million. It invests in a portfolio of high growth-potential sustainable UK companies, which it believes can deliver high returns to investors in renewable energy generation and technology, energy efficiency, sustainable living, low carbon products and technology, and waste recycling and reduction sectors. The second Triodos EIS Green Fund (Triodos EIS Green Fund II) was open for investment until 9 April 2010, and raised GBP 1.65 million.
Energy and Climate Investment Funds Prospects for 2011
Triodos Investment Management believes that renewable and energy saving finance has great potential. But it will have to find ways to grow under increasingly difficult circumstances because of economic and budgetary problems in most European Countries.
Triodos Groenfonds is a clear example of a successful public-private partnership. However, the new Dutch government has decided to reduce its role in it. Nevertheless, Triodos Groenfonds is likely to be able to maintain a solid position in market share, return on investment and fund volume. Triodos Renewables Europe Fund expects to grow in 2011 to EUR 75 million. Ampère Equity Fund aims to become fully invested before the end of 2011.