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Columbia Threadneedle: acquisition of two renewable energy assets

“These assets are a great opportunity for fund investors, allowing them to contribute to the energy transition away from fossil fuels initiated by Europe,” explains Heiko Schupp.

The Columbia Threadneedle European Sustainable Infrastructure Fund (ESIF) announces the recent acquisition of two renewable energy assets, which is part of building a diversified clean energy portfolio for the fund.

The first of these assets is a portfolio of mini hydropower plants in the Marche region of central Italy. By exploiting the current of a river, the power plants ensure profitable, flexible, highly efficient and carbon-free energy production. The second asset acquired by the fund is the Storrun Windkraft, an onshore wind farm located in Sweden, in the Sundsvall region, which corresponds to the SE2 zone of the Nord Pool market. In service since 2010, this plant includes 12 Nordex turbines with a capacity of 2.5 MW.

The wind farm and the mini hydroelectric plants have a combined power generation capacity of approximately 70 GWh per year. With long economic life cycles and proven technologies, these assets provide ESIF investors with comfortable and stable cash flows. These are climate-friendly energy sources that do not generate air pollution or toxic by-products1, thus meeting the Sustainable Development Goal (SDG) of the United Nations: “Clean and affordable energy”. Bringing electricity and jobs in industry and commerce to local people also has social benefits.

Heiko Schupp, Global Head of Infrastructure at Columbia Threadneedle Investments: “ESIF’s management team is delighted to add its first renewable energy assets to the fund’s portfolio, which generate enough electricity to power more than 7,000 homes2. These assets represent a great opportunity for investors in the fund, allowing them to contribute to the energy transition away from fossil fuels initiated by Europe. Hydroelectricity, for example, accounts for a third of all electricity from renewable sources in Europe3 but this source of return is often overlooked and is weakly correlated with the two traditional asset classes and other types of renewable energy. The new investments complement ESIF’s existing sustainable positions and we will continue to grow the fund’s clean energy portfolio.”

The ESIF is Columbia Threadneedle’s open-ended evergreen fund that invests in unlisted mid-sized sustainable infrastructure stocks located in Europe. By targeting investments likely to produce favorable and measurable environmental and social impacts, the fund holds a majority stake in the capital of Lefdal Mine Datacenter, a unique “green” data center located in the heart of an underground mine in Norway. As part of a consortium with Brittany Ferries, the ESIF is also a shareholder of Condor Ferries, a freight and passenger transport company which connects the Channel Islands with France and the United Kingdom.

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Columbia Threadneedle’s infrastructure competency is part of its global alternative product management business, which offers less liquid diversification assets to investors, either as a stand-alone strategy or as part of bespoke solutions. With the acquisition of the asset management division of BMO in Europe completed on November 8, 2021, the group now manages more than 35 billion euros4 alternative assets: infrastructure, real estate (UK, Europe and USA), real estate securities, private equity, hedge funds and absolute return strategies. This strengthened alternative products management unit is led by Stewart Bennett, Global Head of Alternatives at Columbia Threadneedle Investments, subject to regulatory approval.

The acquisition of these two assets in the field of renewable energies is the result of bilateral work, in particular thanks to the existing relations of the ESIF in this sector, and was financed without recourse to debt.

2 Source: Columbia Threadneedle Investments, au 31 janvier 2022
4 As of December 31, 2021, figures for the Columbia Threadneedle Investments and BMO GAM group of companies

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