We have been deploying renewable energy technologies on a large scale for many years now but as Elizabeth Pfeuti writes on the Chief Investment Officer website that after a period of hesitation European insurers have jumped into renewable energy infrastructure investment.
Insurers Commit to Renewable Energy Infrastructure
A consortium of European insurers have committed €556 million ($622 million) to a major renewable infrastructure project, in the first such deal to be spearheaded by investors in the sector.
German insurer Talanx has taken the lead role—the first insurer to do so—in the commitment to buy 50% of the Gode Wind 1 offshore wind farm through Global Infrastructure Partners.
“Our medium-term plan is to invest up to €2 billion in infrastructure projects, and we have systematically built up our expertise in this area in recent years,” said Dr Immo Querner, CFO of Talanx AG. “In the long term we could potentially invest up to €5 billion in a broadly diversified range of alternative investments.”
“Our medium-term plan is to invest up to €2 billion in infrastructure projects.” Insurers have lagged their fellow institutional investors in committing to infrastructure projects, partially due to concerns about how they would be considered under Solvency II regulations.
However, Talanx, which has an annual premium income of €29 billion, has provided €320 million debt capital, with the remainder of the funding coming from fellow German insurers and asset managers.
Gode Wind 1, with its sister project Gode Wind 2, makes up the largest offshore wind farm in Germany.
The move follows similar deals made by Danish, Norwegian, and Dutch pension fund investors, who have stamped their mark on the renewable energy sector in recent years.
The deal needs approval from competition authorities and is expected to complete at the end of the month.