Finnish investment outfit Korkia has launched a private equity fund investing in renewable energy projects mainly in Europe, with a deal flow in excess of 4GW.
Focusing on project development will offer over 10% annual yield potential for the fund, Korkia stated.
Korkia’s investment strategy focuses on financing renewable energy in the project development stage, which differs from a more common model where the focus is on building and selling energy plants and in the pursuit of electricity sales revenue.
In the UK over 3.5GW deal flow for solar energy has been confirmed, of which 264MW is in the late stage development phase and 963MW in the active development phase.
In Finland Korkia has a confirmed project deal flow of over 600MW for wind power projects, of which 100MW is in late stage development and 435MW in active development.
As for new markets, Korkia is investigating the Finnish solar market and Swedish solar and wind markets, in which project development collaboration negotiations are already ongoing.
Korkia executive vice president for asset management Jussi Lilja said: “In our experience, investments in project development with a distributed project portfolio can generate over 10% p.a. expected yields, compared to 5-8 % in the construction and operation phases.
“The holding period in the project development stage is only 2 to 3 years.
“This allows the fund faster capital turnover than in the construction and operational stages, and thereby our customers to achieve better returns.”
With “years of experience in successful energy investments”, Korkia is a renewable energy specialist having its own energy team of more than 20 people.
The company invests primarily in the Nordic countries and Europe, but also in other markets such as Latin America.
Korkia’s investment criteria include a developed market and strong political support for renewable energy, attractive returns, favourable financial markets, experienced local EPC market and exclusivity to the deal flow of the project development company.