BlackRock has completed an initial close for its latest renewable power fund, Renewable Income Europe, with €275 million in commitments secured from a number of institutional investors in Europe and Asia.
Renewable power generation has been a leading source of investment flow within infrastructure over the last five years, and the firm expects this trend to continue, increasing the need for capital to finance a rapidly evolving power generation sector.
Renewable Income Europe has a 20-year buy-and-hold strategy, and will deploy capital in European renewable projects providing long-term inflation-linked income to investors. Investments are made on an unlevered basis and focus on projects across wind and solar photovoltaic systems. The fund’s investment team will consider opportunities on a pan-European basis, although they believe the majority of opportunities will be sourced in Western Europe.
BlackRock’s Infrastructure business currently owns and manages 66 wind and solar projects in Europe and North America. Since 2011, the firm has raised over $2 billion (€1.8 billion) in equity capital focused on investment in renewable power projects, via funds and associated co-investment programmes, and the Renewable Income Europe is its fourth Renewable Power fund to hold a close.
Results of a recent BlackRock poll of 174 institutional investors worldwide suggest many currently struggle to generate sufficient returns to meet their liabilities, and are looking for income from sources other than the traditional asset classes and passive investments that have hitherto been comprised their portfolios. Around 60% intend increase their exposure to real assets as a result.
Rory O’Connor, head of European investment for BlackRock’s renewables division and manager of the fund, noted demand for renewables is being driven the world over by the need to replace ageing power generation facilities, improvements in cost competiveness and concerns over climate change.
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