Concentrated PV

We chat with Jamie Richards a partner at investment firm Foresight on the strategy of the firm's solar fund and the types of management teams and technologies they are currently willing to back.

Q: What is your investment remit in terms of deal size (equity and debt) and geographic markets?

A: Foresight's solar funds acquire or build solar power plants that generate renewable electricity mainly in Spain and Italy. Project sizes are in the Euro 25m to 150m range of which 75-80% would normally be debt funded with the balance funded from equity. 

Q: You recently boosted your solar team with new investment director Federico Giannandrea. Is this in line with a growing number of solar investment opportunities or the need for greater specialised expertise?

A: Adding an Italian Investment Director to the team is in line with the growing pipeline particularly in Italy where domestic expertise is critical. Legal expertise is also important in executing transactions in Italy and Federico's background with a top tier legal advisor in Rome helps us optimise investor protection. His background at Deutsche Bank over the last two years where he was doing the same job there as he is now doing for us gives us a real market edge in terms of local knowledge and sensitivities.

Q: Which areas of solar are within your target markets and what are some of the criteria your target companies must meet?

A: Solar photovoltaic (PV) is our preferred solar subsector because the risk adjusted returns match the low risk criteria of the solar funds we manage. Projects must be either already operating or at construction stage. We do not take development risk. First Solar thin film is widely regarded as bankable and therefore in line with our strategy however other thin film manufacturers and CPV technology are less mature and so are not currently on our radar.

Q: How would you describe the quality of investment leads being introduced to the fund whether through corporate finance contacts or businesses coming to you direct for funding?

A: The local teams we have in Italy and Spain joined us with a great deal of experience and a wide network in the sector. This differentiates our solar dedicated team of 5 from many other investment teams in the sector and as a result we are typically alerted to high quality new opportunities very early on. We now originate all our opportunities directly which helps minimise transaction costs. 

Q: Can you tell us of a recent deal and how it came about?

A: Based on his background and network in the sector our Spanish Investment Director put the club of banks together in Madrid for our most recent transaction which made the difference when it came to meeting the vendor's timing expectations. The Spanish vendor needed the Sale and Purchase Contract to be executed in Spanish which emphasises the importance of having a local team in place.