Korkia launches a new fund focusing on renewable energy project development

News | 21.2.2022

Finnish investment and advisory company Korkia has launched a new private equity fund investing in renewable energy project development companies mainly in Europe. Focusing on project development will offer over 10 % annual yield potential for the fund.

Global energy markets are currently boosted by the green climate transition and renunciation of carbon based power generation, continued growth in total energy demand and a huge amount of capital seeking new capacity. This leads to massive investments, especially into renewable energy.

IEA evaluates that from 2030 to 2050 about 600 GW of new solar power capacity and 340 GW of new wind power capacity will be needed annually. Reaching the global target of carbon neutrality by 2025 means that annual investments in clean energy should rise to 3.500 EUR billion by 2035. Wind and solar power are expected to become the cheapest form of electricity generation in the world.*

Yield and impact potential higher than in typical funds

Korkia’s investment strategy focuses on financing renewable energy in the project development stage, which differs from a more common model where the focus is on building and selling energy plants and in the pursuit of electricity sales revenue.

– In our experience, investments in project development with a distributed project portfolio can generate over 10 % p.a. expected yields, compared to 5-8 % in the construction and operation phases. The holding period in the project development stage is only 2 to 3 years. This allows the fund faster capital turnover than in the construction and operational stages, and thereby our customers to achieve better returns, Jussi Lilja, Korkia’s EVP, Asset Management comments.

– Our fund offers a completely new, attractive investment opportunity. The environmental impact of renewable energy project development is also significant, as one euro invested can create nearly twenty times more energy production capacity than investing in the construction or operational stages. If the goal is to enable more environmentally sustainable energy production capacity, investing in the project development stage is the right choice, Korkia´s  EVP, Sustainable Energy Mikko Kantero explains.

Strong deal flow and an experienced renewable energy investor

With years of experience in successful energy investments, Korkia is a renewable energy specialist having its own energy team of more than 20 people.

The company invests primarily in the Nordic countries and Europe, but also in other markets such as Latin America. Korkia’s investment criteria include a developed market and strong political support for renewable energy, attractive returns, favorable financial markets, experienced local EPC market and exclusivity to the deal flow of the project development company.

Korkia has a strong deal flow of more than 4 GW. In the UK over 3,5 GW deal flow for solar energy has been confirmed, of which 264 MW is on Late Stage Development and 963 MW on Active Development. In Finland it has confirmed a project deal flow of over 600 MW for wind power projects, of which 100 MW is on Late Stage Development and 435 MW on Active Development. For new markets, Korkia is currently investigating the Finnish solar market and Swedish solar and wind markets, in which project development collaboration negotiations are already ongoing.

Further information: 

Mikko Kantero, SVP Sustainable Energy, Korkia
Tel: +358 50 2247, e-mail: mikko.kantero@korkia.fi

Korkia is an internationally operating investment and advisory company specialized in sustainable development. To our investor, corporate and institutional clients, we offer alternative investment opportunities, asset management and management consulting. Our team consists of 50+ experts and our headquarters are in the heart of Helsinki. Our success is measured in concrete actions towards a more sustainable future. There is no need to choose between sustainability and growth. We combine them.

* Renewables Were The World’s Cheapest Energy Source in 2020 | World Economic Forum (weforum.org)