Investment ‘platform’ a shot at redemption

There is a real urgency to take investment in renewable energy to a new plateau and Jim Barry, as he moves from NTR to BlackRock Alternative Investments, is getting an opportunity to make a new name for himself, writes Kyran Fitzgerald

AMID all the talk of negotiations on the formation of a new Government, and renegotiating the onerous terms of the EU/IMF loan package, it is easy to forget that people in the business world are getting on with their lives.

On Monday, an important announcement emerged from NTR, the leading Irish renewable energy company.

After more than 10 years at the helm, the group’s chief executive, Jim Barry is moving on to a new job, heading up a renewable energies investment “platform” controlled by the world’s largest asset manager, BlackRock Inc.

A new entity known as BlackRock Alternative Investments is being established. It will function as the renewable energies investment division of BlackRock Inc, a group with a market capitalisation of around $30 billion (€21.63bn).

It will be based in Dublin, with offices in New York and London. Barry will run the operation as chief investment officer.

He will be taking a number of key executives with him from NTR and the plan will be to grow the executive team at the company to about 25. The move is being seen as an important boost for the so-called “Green IFSC”, a project which was pushed hard by the Green ministers, John Gormley and Eamon Ryan.

While BlackRock will have a 100% investment in the entity, NTR stands to gain a significant earnout income flow if the venture proves successful. For regulatory reasons, the term “fund” is not being used by the promoters who instead opt for the term, “platform”, but to all intents and purposes this is about providing financial grease for the renewables wheel.

The case for renewables has received a significant boost as a result of recent events in the Middle East.

The chairman/chief executive of BlackRock, Laurence Fink, has in recent days, expressed concern that a slowdown in oil production could derail the recovery.

For Jim Barry, the move represents a return to old hunting grounds in the world of international investment. Prior to joining NTR in 1998, he worked as a management consultant with leading firm, Bain & Co. He carries to the new job a raft of expertise in the renewables space.

Life for Barry and NTR has not been that easy in the past year or so.

Through much of the noughties, NTR enjoyed spectacular success culminating in a $1.3bn combined payout from the sale of its interest in the West Link toll bridge to the state, and the sale of the high-flying wind energy company, Airtricity to Scottish & Southern Energy.

NTR returned a significant sum — over €250m — to shareholders while making a huge commitment to the development of its renewable energy and waste businesses. In the period up to mid-2008, it invested $700m in projects in areas such as wind, solar energy and bioethanol, with a further $150m being pumped in subsequent to this.

Key investments include: Green Star US, the leading US independent recycling facility; a 31% stake in NASDaq-quoted company GPRE; and Wind Capital, leading independent US wind energy company.

The result has been a few serious financial hiccups. In the year to March 31 last, losses at NTR amounted to €210m, largely as a result of a €148m impairment charge on its waste management and solar businesses.

The NTR share price has plummeted, with the Roche family and Philip Lynch’s One51 both taking significant hits. At the recent AGM, the NTR chairman, Tom Roche, called on shareholders to keep the faith.

At the time, Jim Barry stressed the medium term potential of the group’s investments.

NTR has got badly burned by its solar energy investment. Solar projects have been held up by planning delays, including opposition from Red Indian groups concerned at the threat to a burial site. The company’s suncatcher technology has lost out to its photovoltaic rival. NTR has gradually unwound its position in solar in order to reduce its cash burn.

Barry has been insisting that the bulk of the US renewables business — 70% — that is non-solar is in good shape.

The bio-ethanol business is performing strongly while the waste management company, Green Star North America, is being turned round.

Difficulties with the solar business meant that an ambitious plan to raise $2bn did not get off the ground — the decision was accordingly made to cut back on technical development work.

Two deals have been completed with the aim of recovering the capital investment over the next 18 months.

Closer to home, GreenStar Ireland remains a source of concern. The waste recycling business has been hit by recession, and by the Poolbeg incinerator. NTR continues to battle strongly for restraints to be placed on the capacity of Poolbeg, arguing that the regulatory system remains dysfunctional. It brought a case successfully to the High Court over the incinerator. This is under appeal to the Supreme Court.

Barry will be handing the baton at NTR almost straightaway to Mike McNicholas and will be moving to get the BlackRock renewables venture up and running as quickly as possible.

The new venture is a big shot at redemption for Barry after a period of under-performance due in large part to bad luck.

No detail is as yet being provided on investment projects and the likely scale of financial commitment.

There is now an urgency about the need to move investment in renewable energy to a new plateau and Barry has a real opportunity to make a new name for himself.

Picture: Jim Barry: It has been announced the NTR chief is moving to a new job, heading up a renewable energies investment platform controlled by asset manager, BlackRock Inc. The venture is an important boost for the so-called Green IFSC, championed by the former green ministers. Picture: Billy Higgins

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