Bluefield bets on UK solar potential with market debut of fund

Tue Jun 25, 2013 7:44am EDT

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By Christoph Steitz

FRANKFURT, June 25 (Reuters) - Asset management firm Bluefield Partners is betting that the solar industry has the potential to grow in Britain, while taking a beating elsewhere in Europe, benefiting from favourable laws and a relatively underdeveloped market.

Bluefield, which specialises in buying and managing energy and infrastructure assets, plans to list the Bluefield Solar Income Fund on the London Stock Exchange on July 12 to raise up to 150 million pounds ($231 million) for the acquisition of solar plants in Britain.

"The UK is in its infancy compared to markets like Germany or Italy," James Armstrong, managing partner at Bluefield, said on Tuesday.

"We're just going into a market that has significant growth potential."

According to figures by European solar industry association EPIA, Britain's cumulative solar installations more than doubled in 2012 to 1.83 gigawatts (GW).

This compared with 32.4 GW in Germany and 16.4 GW in Italy, where lavish incentives for solar power have led to soaring installations over the past few years.

Demand in these markets is expected to drop sharply this year, however, as governments reduce the incentives and make investment in solar power less rewarding.

Armstrong pointed to favourable legislation in Britain, which said in its updated renewable energy roadmap in late 2012 that its solar market had the potential for up to 20 GW by 2020.

Bluefield's fund aims to invest the proceeds from the initial public offering (IPO) within 12 months to buy solar plants that it expects will provide stable annual levels of power generation with low operational costs.

Armstrong said he expected the fund to grow to about 300 million to 400 million pounds in assets over the next two to three years.

Bluefield has clinched deals with British power companies including British Gas Solar, the solar contracting unit of Centrica, for exclusive access to solar projects until April 2014.

The Bluefield fund will finance solar projects but not build them, reducing its operational risk.

Armstrong did not want to disclose plans for concrete investments after the IPO, saying only: "We have a deep and significant pipeline."

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