Macquarie launches green infrastructure bank GIG in North America

[June 28, 2018]   By David French

NEW YORK (Reuters) - Macquarie Capital is launching the Green Investment Group (GIG) in North America, it said on Thursday, seeking to capitalize on the region's growing renewable energy industry and heightened demand among professional investors for its assets.

GIG was originally the Green Investment Bank, created by the UK government in 2012 as the world's first bank dedicated to supporting green infrastructure schemes. It was sold to Macquarie Group <MQG.AX> in 2017 for 2.3 billion pounds ($3.02 billion).

Having expanded into Europe and, most recently, Asia, GIG will now operate in the United States and Canada, aiming to finance the development of renewable energy schemes, as well as structuring numerous smaller projects into larger investments that can be sold to institutional investors.

"Fundamentally, it's about asset creation, bringing projects together and de-risking them to make them attractive for insurance companies, pension and investment funds to own," Chris Archer, head of green energy for the Americas at Macquarie Capital, told Reuters.

Renewable energy generation in the United States has been growing at a significant pace, accounting for over half of the country's annual added electric capacity in five of the six years between 2012 and 2017.

While President Donald Trump's administration has implemented policies regarded as unfavorable to the renewables sector, including ending tax credits and placing tariffs on imported solar panels, demand from states and companies for more clean energy and the falling cost of technology are expected to support growth.
 

The logo of Australia's biggest investment bank Macquarie Group Ltd adorns a desk in the reception area of their Sydney office headquarters in Australia, October 28, 2016. REUTERS/David Gray/File Photo

Investment bankers and industry analysts have noted there is an unprecedented amount of private capital trying to invest in the U.S. renewables sector.

However, Mark Dooley, Macquarie Capital's global head of green energy, believed the bank's focus on developing projects from the start meant there were still plenty of schemes it could back.

"There's a lot of capital chasing fully executed, packaged and operating projects that are easy to invest in. We're in there when work needs to be done, whether it's finance, structuring or technical skills."

As part of its North American expansion, GIG will partner with two former First Solar Inc <FSLR.O> developers, Brian Kunz and Nik Novograd, to create Candela Renewables, which will develop solar projects in the U.S.

(Reporting by David French; Editing by Leslie Adler)

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