European investor Greencoat Renewables announced on Tuesday it was seeking a secondary listing on the JSE, paving a new way for SA investors to capitalise on Europe’s green energy boom.
Greencoat will be the first JSE-listed company with an entirely offshore portfolio of renewable energy assets, allowing JSE shareholders to invest directly in European renewable energy infrastructure for the first time.
Greencoat CFO Diarmuid Kelly told Business Day the move was a potential turning point for SA investors.
“We are delivering a first to SA’s capital markets: access to a hard currency, high-yielding business with ESG-aligned offshore assets through a JSE listing,” he said, referring to environmental, social and governance investing.
“In terms of growth opportunity, we are well positioned to continue playing a growing role in Europe’s accelerating energy transition, and to capitalise on the expected €1.3-trillion investment required to be made into European renewable energy by 2030.”
Global investment in energy transition infrastructure has increased exponentially over the past five years, hitting €2-trillion (about R41-trillion) last year, according to asset manager Schroders.
Schroders estimates that investment worth $28-trillion in renewable infrastructure is needed over the next three decades, and more than double that is needed to reach net-zero emissions by 2050.
While SA’s renewable energy landscape is shrouded in policy uncertainty, companies such as Greencoat offer the opportunity to invest in jurisdictions with government-backed tariffs or “particularly strong fundamentals that support merchant energy markets”.
The group has no plans to acquire assets in SA.
“The business was specifically set up to provide investors with experienced European-denominated renewable energy assets. About 50% of the portfolio is in Ireland currently, the rest is between Spain, France, Germany and Sweden,” Kelly said.
Kelly said the group’s investment case mirrors that of Sirius Real Estate, which in 2014 became the first European property company to list on the JSE. Kelly is a former Sirius CFO.
“If you look at what a trailblazing move that was, it’s not lost on me that this could be something similar from a renewable energy infrastructure perspective. We’re proud to be the first organisation to make this work and we looking forward to executing the physical listing over the next few weeks,” he said.
The company owns and operates 40 assets across Ireland, Spain, France, Germany and Sweden, including wind and solar farms and battery storage with a total capacity amounting to about 1.5GW.
It sells clean energy produced at these sites to national grids and corporates in Europe directly through commercial power purchase agreements. It has a market capitalisation of about €850m and has been listed on the Dublin and London stock exchanges since 2017.
The group’s listing on the JSE is expected to become effective later this year, subject to regulatory approvals that it said were “well advanced”.
The company does not plan to issue any new shares as part of the listing and intends to keep its listings on London’s Alternative Investment Market and Dublin’s Euronext Growth Market.
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