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FMO invests in Latin Renewables Infrastructure Fund

Monday 23 July 2012 13:52

The Latin Renewables Infrastructure Fund will invest in utility-scale, renewable resource power generation - principally wind and hydro power - in Latin America, with an immediate focus on Central America.  Market conditions for renewable energy in Latin America are highly favorable with assets being price competitive with fossil-fuel based generation (e.g., oil, gas, coal) with little to no subsidies required. The target size of the fund is $150 - $200 million.

The Fund is the first offering by REAL.  REAL is led by four partners who have delivered highly successful results over many years of investing in the Latin American power sector with firms including; Conduit Capital Partners and Globeleq, as well as elsewhere in the emerging markets with Emerging Markets Partnership and Wolfensohn and Company.  The Fund will take equity stakes in generation assets of various stages of development to create a portfolio of investments which are expected to provide superior risk-adjusted returns.  Typically, renewable power investments in the fund’s target markets have very low operational risk, long term, fixed-price and dollar-indexed power sales contracts, and solid credit structures.  In addition to the important global and local environmental benefits resulting from the Fund’s investments, the Fund’s projects will also provide important social and economic benefits to local communities.

The Fund was able to achieve a strong first closing with active support from its anchor investors: the German development finance institution Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG); the Netherlands Development Finance Company (FMO); the International Finance Corporation (IFC); and Obviam, the Investment Manager for the Swiss Investment Fund for Emerging Markets (SIFEM).  The participation of these influential institutions as investors will further enhance the fund’s stature within its target markets.

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