London, 8 May 2007. 

HgCapital, the European sector-focused investor, has acquired a French wind farm portfolio from Germany’s ENERTRAG AG for €69m.  The acquisition continues HgCapital’s ongoing strategy of assembling a plus portfolio of European renewable energy projects with a total value of in excess of £1 billion.

The portfolio consists of four wind farms located in the Picardy region of France using 23 Enercon-manufactured turbines with a total capacity of 47.5MW.  The wind farms were developed and will be built by ENERTRAG, one of Europe’s leading independent power producers, wind farm developers and operators.  One wind farm is already in operation and the other three will be built over the next year.  In a long-term partnership with HgCapital, ENERTRAG will operate and maintain the wind farms for 20 years.

This transaction brings the total power output of HgCapital’s operating European renewable energy portfolio to over 100MW (enough to power over 40,000 homes), representing over €150 million in investment volume.  HgCapital’s other wind farm investments include Sorne Wind - Ireland (32MW), Tir Mostyn - North Wales (25.25MW) and Wind Direct / Workington Energy (4MW) - Cumbria, England.  In addition to its existing renewable energy portfolio, HgCapital has also secured the rights to acquire further renewable energy projects in Europe which would produce over 500MW of power output.

HgCapital’s dedicated renewable energy fund, Hg Renewable Power Partners, provided the acquisition equity. HgCapital and ENERTRAG have also entered into a joint acquisition, construction and term loan facility with the Bank of Scotland. 

Tom Murley, HgCapital’s Director for its Energy investments commented:

“We are excited to reach this agreement with ENERTRAG, whose development, construction and operational expertise, commitment to quality and long-term partnership approach make them the ideal partner for HgCapital.  This transaction is indicative of the trend in European wind financing towards professional investors and strong developers establishing framework arrangements to finance larger wind portfolios.  We hope that this is the first of many investments with ENERTRAG.  Our expansion into France extends our Europe-wide strategy of investing in quality assets with the best developers.  We are also very pleased to have entered into an innovative bank financing structure with both ENERTRAG and the Bank of Scotland which has reduced overall costs.” 

Detlev Hartmann, Chief Financial Officer of Enertrag said:

“ENERTRAG is pleased to have entered into a long term strategic partnership with HgCapital, creating synergies between our complementary skill sets. We consider HgCapital to be the market leader in the provision of quality equity financing, delivering client-oriented solutions for customers and superior returns to investors. We have been particularly impressed by the HgCapital team’s high degree of professionalism, know-how and dedication, as well as their unparalleled integrity. Closing this transaction has been an important milestone in ENERTRAG’s international growth strategy. We look forward to working with HG on future transactions.”

HgCapital was advised by Vinson & Elkins, Jeantet & Associates, Deloitte and Touche and Wind Prospect Ltd. 

Bank of Scotland was advised by Norton Rose, Willis and Wind Prospect.