A German asset investment management company, KGAL, has launched a new renewable energy impact fund—a first for the company—that will focus on solar investments as well as onshore and offshore wind and hydropower projects in some EU countries.
The ESPF 5 impact fund run by the company is the first to be launched under the Article nine sustainability standard. The fund will provide investments for the advancements in energy generation and storage technologies—with the development of energy infrastructure also being considered by the group—aimed towards a target internal rate of return range from 7% to 9% over 10 years.
Christian Schulte Eistrup, Head of International Institutional Business at KGAL, says, ‘For investors, sustainability and impact measurement are increasingly essential, and we at KGAL can fully relate to this as sustainability aspects are an integral part of our business and risk strategy. [...] That is why we are incredibly proud to launch one of the first renewable Impact Funds under Article 9, with sustainability investment being first and foremost, in response to investor demand’.
Continued Support of Renewable Energy Innovation
Since the creation of the ESPF series of products, KGAL has experienced a significant increase in demand, which has led to the recent launch of the ESPF 5. This product will succeed the ESPF 4, which performed well for the company up to the closure date in 2019. The fund closed with €750mn in equity commitments and supports the high demand for renewable energy innovation. With over 90% of the capital from predecessor funds—ESPF 4 or older—already assigned to contracts, KGAL is able to continue its support for the sector through investments in renewable assets that contribute to wider initiatives.
Michael Ebner, Managing Director and Head of Sustainable Infrastructure at KGAL, says, ‘KGAL entered into renewables investing in 2003 and has acquired over 150 photovoltaic plants, wind farms and hydroelectric power plants on behalf of clients since then, with investments to date amounting to more than €3.2bn across 10 European countries’.
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