In line with its responsible investor philosophy, Mirova is committed ...
Financing the energy transition
Raphaël Lance, Head of Renewable Energies, Mirova Environment and Infrastructure, took part in the CDC Climat conference held in Paris on 4 June on the theme “Financing the energy transition: challenges and outlook” with two round table sessions:
“Are Climate bonds a possible answer to the challenges of financing the energy transition?” and “What are the conditions for financial players to make a commitment?”
Raphaël Lance took this opportunity to explain the part played by the Fideme fund in launching the wind energy industry in France.
In view of the immature technology and fragmented project market, with no access to senior debt, our Fideme fund relied on a €15 million investment by ADEME which enabled us to raise a further €30 million from private investors.
All in all, the Fideme fund has been involved in financing 27 renewable energy projects, representing total investments of €320 million. The combination of small-scale projects diversified investor risk, while the contribution of public funds made it possible to cover the construction risks inherent in launching not yet mature technology industries.”
Project company financing through the Fideme fund took the form of mezzanine debt, coming in between the developers’ equity and the ‘project financing’ bank debt. As the fund took part in financing projects totalling €320 million in investments, the multiplier effect of public funds came in at around 21x.
For investors, the project was attractive on three counts:
- projects over a fairly limited horizon (around 10 years);
- current return sufficient to pay out coupons;
- virtually no development risk.
About Mirova Environment and Infrastructure
Mirova Environment and Infrastructure, a fully-owned subsidiary of Natixis Asset Management, is an investment fund management company specialising in project financing for renewable energy infrastructure in Europe and public private partnerships for a wide variety of projects in France (universities, hospitals, urban transport, etc.).
Its 4 funds (Fideme, Eurofideme 2, Fideppp and Fideppp 2, Mirova Environment and Infrastructure) represent a total commitment of over €360 million* in infrastructure projects as of 30 June 2013.
(*Including €264 m invested directly in solidarity organisations.)
The funds managed by Mirova Environment and Infrastructure are not subject to the approval of the French Financial Market Authority (AMF) and may adopt whatever investment rules outlined in the prospectus. Prior to any investment, investors must check that they are legally authorised to invest in a fund; in particular, investment in funds managed by Mirova Environment and Infrastructure is strictly reserved for professional investors in compliance with the criteria stipulated in their prospectus.