'On track to be the biggest' | CIP raises €5.6bn for latest renewables fund - Recharge
'On track to be the biggest' | CIP raises €5.6bn for latest renewables fund | Recharge
Danish private equity firm Copenhagen Infrastructure Partners (CIP) is aiming to manage the world’s largest renewable energy fund in its class by closing the first part of its flagship CI V facility with capital commitments of €5.6bn ($6.2bn).
CIP said the take-up on its fifth CI fund puts it "on track to reach its target fund size of €12bn and become the world's largest greenfield renewable energy fund."
In its statement, released Monday, CIP said the CI V process had attracted a large group of leading institutional investors across continental Europe, the Nordics, the UK and the Asia-Pacific region, while some existing investors had also shown an appetite for more exposure.
Jakob Baruel Poulsen, Managing Partner at CIP said: "Reaching nearly €6bn at first close is a testament to the importance of the fund, and the confidence placed in our industrial approach to energy infrastructure investments."
The fund will focus on global greenfield investments within large-scale renewable energy infrastructure and promises to diversify investments across technologies such as contracted offshore wind, energy storage, onshore wind and solar in low-risk OECD countries in North America, Western Europe, and Asia Pacific.
The new fund is bigger than the predecessorsCI I, CI II, CI III, and CI IV but was marketed as ”applying the same well-tested industrial value-creation approach, whereby projects are entered early and significantly de-risked and optimised, prior to the start of construction to capture the attractive greenfield premium.”
Poulsen said CIP believed that the market timing was favourable for a bigger fund of this kind and referred to the ”strong and accelerating demand for new renewable infrastructure to secure energy independence and deliver on ambitious climate pledges creates many new investment opportunities.”
CIP already manages a large and diverse investment pipeline across renewable technologies, including offshore and onshore wind, solar PV, biomass and energy-from-waste, transmission and distribution, reserve capacity, storage, advanced bioenergy, and Power-to-X.
CIP said its new CI V facility gets off to a strong start with the largest project pipeline of any CIP fund to date.
In June, CI V took its first final investment decision on a 400MW onshore wind project in the US, expected to start construction in the coming months.
”At first close, the (CI V fund) has ownership of more than 40 renewable energy infrastructure projects with a total potential... commitment of approximately €20bn, corresponding to more than 150% of the target fund size, CIP stated.
Based on the current portfolio, CI V is targeting an additional 20GW of new clean energy capacity.
The fund includes a significant seed portfolio offering what the firm described as ”significant optionality and flexibility in project selection and portfolio construction”
CIP manages 11 funds with around €25bn for investments in energy and associated infrastructure from more than 150 international institutional investors.
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Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”