Irish energy fund buys six Italian solar farms for €25m

An Irish renewable energy fund has snapped up six Italian solar energy farms in a deal worth more than €25m.

Solar21 is an Irish fund that was set up in 2010 and has built up a fund of over €100m to invest in photovoltaic solar farms across Europe.

The fund is aiming to pick up functioning solar farms with long-term, guaranteed feed-in-tariff agreements in place. After several months of indepth due diligence Solar21 agreed to buy the six photovoltaic farms off AEG Power Solutions.

Solar21 chief executive Michael Bradley said: “The acquisition of these showpiece, grid-connected solar farms from AEG Power Solutions in Italy represents excellent value for our investors.

“The fund continues to achieve above-average returns for our clients. We are delighted to add these six farms in southern Italy to our existing portfolio and look forward to expanding the size of the fund with continued investment from new clients who are coming to understand the huge benefits that such a secure investment offers.”

The acquisition of solar energy farms makes sense for pension funds like Solar21, according to AEG chief financial officer Jeffery Casper. “We can understand why a pension- and investment-based fund like Solar21 would choose to buy our solar farms. With stock markets underperforming in the last few years, investors are seeking safe places to lock-in their money for the long term at a significantly higher return backed by sovereign guarantees,” he said.

“Solar energy fits the bill, with predictable cash flows guaranteed by long-term feed-in-tariff agreements,” he said.

Solar21 is eyeing a number of solar farms capable valued at more than €45m. The fund believes investment in government-backed renewable energy projects offer a significantly higher return and more security than pension annuities the NTMA issued last week.

Mr Bradley said: “We are in negotiations to buy another 12 megawatts, worth in excess of €45m. Renewable energy investments based on these 20-year sovereign guaranteed contracts produce healthy and stable returns for those looking for secure environment for pension and cash investments.

“When you contrast this stable investment environment with the current equity market volatility it’s not difficult to see why so many people are drawn to the renewable energy investment concept,” he said.