Investments 

Renewable energy investment trust seeks £250m at launch

Renewable energy investment trust seeks £250m at launch

Aquila Capital is launching a renewable energy income investment trust on the UK stock market.

The Aquila European Renewables Income fund is aiming to raise £255m when it floats on Wednesday June 5.

The trust will own wind, solar and hydro power investment across Europe, but excluding the UK.

Aquila Capital is a Hamburg-based investment firm. The trust will aim to pay a dividend of 5p a share, with the investments being in assets that are already operational and paying an income, and target an annual rate of return of between 6 and 7.5 per cent.

The initial investments made by the trust are likely to be in Iberia and Scandinavia.

Christine Brockwell, lead investment adviser at the soon-to-launch trust, said: "This is a unique proposition for investors to take advantage of the rapidly advancing renewable energy sector in Europe and to participate in opportunities presented by Europe’s energy transition to a low carbon society, which is reshaping the energy market across the continent.

"Aquila Capital has a proven track record of investing in the sector and will use this expertise to provide a balanced mix of technologies that provide stable cash flows and allow for reliable maintenance of dividend targets for investors."

Patrick Connolly, chartered financial planner and head of communications at Chase De Vere said: "The use of renewable energy continues to grow across Europe and throughout much of the world.

"This has resulted in strong performance from renewable energy companies, which is often coupled with an attractive yield, the result being that most existing investment trusts are now standing at a premium. This new company will invest in established assets which are already generating income

"However, there remain doubts about the use of renewable energy as an investment asset for the retail market and as a result this specialist trust which won’t be suitable for most investors."

david.thorpe@ft.com