Renewable energy project developer, Mainstream Renewable Power has created Mainstream Capital to facilitate new low-cost financial structures for future projects said to be in excess of 1.7GW over the next three-years.
With PV power plants becoming categorised as low-risk investments, developers are now becoming increasingly confident that securitised financial instruments such as so-called 'YieldCos' could attract the likes of pension and wealth funds as they seek low risk but decent returns of between 6-8%, typically over 20 years of the lifespan of PV power plants.
In exchange, project developers gain access to low-cost finance which is seen as one the major hurdles to further and sustained growth of the sector.
Eddie O’Connor, chief executive of Dublin-based Mainstream Renewable Power, said that the size and track record of the ompany in building renewable energy power plants meant it was now able to establish its own investment platform to garner capital from the likes of pension funds.
The company noted that it had a project portfolio of over 19GW across Ireland, the UK, Germany, South Africa, Chile, the US and Canada and was actively looking at the best opportunities in new emerging markets.
“We have built a credible business,” noted O’Connor. “When you get this big, there is an exercise in corporate branding in the sense that people know that we know what we’re doing. We have a great track record and our projects allow pension funds and insurance companies to take a sensible outlook over a 20-year period. As the business has grown, the risk-adjusted return has moved from private equity towards long-term, stable infrastructure returns.”