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Blackrock's Foray into the Renewable Energy Sector

By Mark Nicholls | Fri, 04 March 2011 14:40 | 0

Investment management giant BlackRock has launched a new renewable power investment group, led by the CEO of Irish utility NTR – marking its first foray into renewable energy infrastructure investing.

Jim Barry is leading a team of 10 senior staff leaving NTR to run the new group, which is the product of a “strategic relationship agreement” between the two companies.

“This is shaped by NTR’s view that there’s a requirement for new channels of capital to help with the deployment of renewable energy infrastructure,” Barry told Environmental Finance, given the undercapitalisation of independent developers and the pressures on the balance sheets of European and US utilities.

“We didn’t feel that NTR Plc is the right vehicle” for the sort of fund-raising that will be possible through BlackRock – which manages $3.2 trillion – “and for them to make a commitment to go into renewable energy is very good for the sector as whole,” he said.

Jim Barry, from NTR to BlackRock: "requirement for new channels of capital" for renewables

The agreement will see Barry’s team move over to BlackRock within the next couple of weeks, and establish a “new investment platform”. The platform will be 100% owned by BlackRock, but NTR will “retain an economic interest in an identified set of products” it launches, the companies said.

Barry declined to comment on what sort of products the group will launch, the fund-raising target or likely investments, citing regulatory constraints.

However, the group will be headquartered in Dublin with offices in London and New York, and NTR’s renewables investments to date – totalling 4 gigawatts of capacity – have focused on wind and solar in the US and Europe.

Barry said that the initiative is the latest in a string of spin-offs and new businesses launched by NTR over recent years. It spawned Airtricity, a renewable energy developer sold to Scottish & Southern Energy and E.ON for around $2.5 billion, and Green Plains Renewable Energy, the fourth largest ethanol producer in the US, among others.

The move will mark the first investments in renewables infrastructure for BlackRock Alternative Investors, within which the group will sit, and which manages $110 billion of assets. However, BlackRock manages the $2.7 billion New Energy Fund, launched in 2001 and which invests in listed renewable energy stocks.

Barry will be replaced at NTR by Michael McNicholas, currently chief operating officer and a former executive at Irish utility ESB.

By. Mark Nicholls

Source: Environmental Finance

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