EF BRIEFS: Aquila, NRW, Equitix, GIB, New York, Rhode Island, Indiana

Channels: Green Bonds, Investment, Renewables, Stranded Assets

Companies: Aquila Capital, NRW, North Rhine-Westphalia, New York State Common Retirement Fund, Equitix, GIB, Green Investment Bank, Rhode Island State, Indiana Finance Authority, IFA, SUSI Partners

People: Asif Rafique

Aquila Capital to launch '€500m' strategy

Aquila Capital has launched an infrastructure strategy with a focus on shorter-term investments.

The vehicle, which is reported to be targeting €500 million, will invest directly and via funds in projects including transport, utilities, waste disposal and energy.

"Aquila Capital's real assets pipeline, with a focus on selected renewable energy projects, will provide a diverse range of investment opportunities," the firm said in a statement.

The strategy will have a minimum investment period of two years – much shorter than conventional infrastructure investment horizons.

Allocation will be focused on projects and funds in OECD countries, with "significantly" more than 50% being invested in Europe. Operational assets or their operating companies will be targeted.

"Extensive diversification will be achieved through a range of infrastructure sub-asset classes, managers, regions and investment timelines, resulting in a yield profile similar to that of mainstream bonds in terms of levels and frequency of distributions," Aquila added.

NRW set to issue €1bn next sustainability bond

The German State of North Rhine-Westphalia (NRW) is gearing up to issue a €1 billion ($1.1 billion) sustainability bond, one year after its inaugural issue.

Proceeds from the bond will focus on, but not be limited to, green investment, including projects such as renewable energy, biodiversity and public transport.

Oekom has provided a second opinion on the green credentials of the bond.

HSBC is the lead bookrunner for the deal.

 

NY lawmakers launch bid to force public state pension fund to divest

Nearly two dozen state lawmakers have launched a bid to force New York's public pension fund to divest its holdings in oil, natural gas and coal companies.

Senate and Assembly bills floored by the legislators would require the fund to divest holdings in the 200 largest publicly-traded fossil fuel companies within a year and from all others by 2020.

New York State Common Retirement Fund, the state's public sector pension fund, is the third largest in the US, with $178.3 billion assets under management. The move by the lawmakers comes just days after a report by Corporate Knights revealed it had lost $5 billion from its 200 holdings in fossil fuel companies in 2015.

Last year, California State senate passes a similar bill aimed at forcing its public sector pension funds, the California Public Employees' Retirement System (CalPERS) and the California State Teachers' Retirement System (CalSTRS) to divest from coal companies.

Equitix and GIB back Scottish CHP project

Equitix and the the UK's Green Investment Bank (GIB) will acquire a combined heat and power (CHP) project for £9.8 million ($13.7 million).

Via the Energy Savings Investments fund (ESI) – which is managed by Equitix, and in which GIB is a cornerstone investor – and the Equitix Energy Efficiency Fund (EEEF), the pair will buy Ignis Biomass Limited, which owns and operates the 3.5MW site in Scotland. The deal includes a district heating network for the plant.

ESI has committed £4.8 million, while the EEEF – funded by private capital – will invest £5 million.

The project – which currently provides heat and power to a number of public and commercial buildings in the area, as well as more than 200 residential properties – will be upgraded to connect it to 150 new customers by 2017. There will also be "at least" four new, smaller CHP systems developed nearby as part of the agreement.

Rhode Island eyes green bond

The US Senate Finance Committee, which oversees federal bonds in the country, is currently consulting on a proposal for Rhode Island State to issue a green bond.

At a meeting tomorrow afternoon, the body will decide whether to approve the $35 million green bond, which will be a combination of general obligation, refunding and temporary notes.

According to the agenda, proceeds will be used across seven categories, including improvements to parks, land acquisitions, reducing stormwater pollution, brownfield remediation and the development of cycle paths.

In November, Rhode Island Infrastructure Bank issued an $18.3 million green bond to finance the construction and improvements to its wastewater and drinking water infrastructure. In July, the state's Clean Water Finance Agency priced a $56 million green bond to make loans to local government bodies for water abatement projects.

 

Indiana plans additional $175m issue of green bonds

The Indiana Finance Authority (IFA) is set to issue green bonds totalling $175.455 million to fund water improvement projects.

Of this total, $72.425 million will be used to refinance outstanding bonds under the state's 'revolving fund programme' for wastewater pollution control and public drinking water. The IFA issued a similar series of bonds, amounting to $137 million, in February 2015. (LINK)

The new bonds will have various maturity dates between 2017 and 2036, with at least one tranche maturing every year in this period.

They have been assigned a AAA credit rating, in line with the other bonds issued under the programme.

Bank of America Merrill Lynch and Goldman Sachs are the senior underwriters of the issue. The other underwriters are: Raymond James, KeyBanc Capital Markets and Ramirez & Co.

SUSI commits €50m to Engie's energy storage projects

SUSI Partners, a specialist Swiss investment advisor, has agreed to make an equity investment of €50 million ($56 million) in energy storage projects to be developed by French energy giant Engie.

Energy storage has been identified by Engie as a strategic growth area. It has commissioned its first large-scale battery-based storage project – a 2.4MW lithium-ion system – in Corsica and is also assessing opportunities in the UK, the US, Chile, Germany, Ireland, Italy and France.

The French company said the €50 million from SUSI would help it diversify the risk of its new developments.

"Third party financing represents the next step in the sector's development and we are delighted to team up with Engie to provide the necessary capital for their projects," said Asif Rafique, SUSI's managing director for energy storage.

SUSI has approximately €500 million of assets under management and aims to launch a dedicated energy storage fund in the next three months.