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Aquila Capital Renewables Fund III S.A., SICAV-SIF


Head Investment Management | Energy & Infrastructure EMEA

1 Managed Funds

The Fund gives institutional investors access to attractive wind and solar investments. This balanced investment strategy will be tailored to the risk/return requirements of institutional investors. At first closing, investors will acquire a portfolio of existing and producing photovoltaic and wind power plants with the following characteristics:

  • Regions/currency: mainly eurozone countries; excluding Greece, Italy, Portugal, Spain, Cyprus, Malta, Slovakia, Slovenia.
  • Power marketing: focus on legally or contractually secured fixed payments.
  • Project phase: predominantly turnkey or already operational projects; development risks are excluded.
  • Target share of average debt capital: 50% (max. 60%).


The increased investor appetite for real assets is likely to be accompanied by strong growth in the supply of real asset investment opportunities.

The economic growth accompanying population expansion will fuel demand for commodities, part of a change process which will be highly energy intensive. This also signals further growth in regenerative energy sources. This translates to a  huge demand in investment requirements, beyond the reach of public financing alone, which will create a significant opportunity for the investment of private capital.

There is also increasing scope for investments in existing real asset structures. As financial deficits remain high in the developed world, a number of governments have chosen to privatise and dispose of mature government-owned infrastructure assets, such as airports and toll-roads, in the quest for liquidity. This is providing investors with more opportunities to invest in existing infrastructure assets.

Master Data

Target Fund Size EUR 300 m
Target allocation - Onshore Wind power: 30%-70% - Photovoltaic (PV): 30%-70% - Infrastructure: 0%-15%
Target return (Target IRR) 5% - 7% p.a. after local taxes and fees*
Target leverage 50% (target), 60% limit at portfolio level
Term 15 years (+ extension option)
Name Aquila Capital Renewables Fund III**
Asset class Infrastructure / Renewables
Sector Wind power and Solar PV
Investment Advisor Aquila Capital Management GmbH
AIFM Alceda Fund Management S.A.
1st Closing May 2015, capital investment of approx. EUR 100 m
Investment period Period from the first closing until the second anniversary of the final closing date
Legal structure S.A., SICAV-SIF
Currency EUR ***
  • Annotations:
  • * The target IRR describes the targeted return of the planned investments by the fund and does not constitute a binding profitability requirement or any guarantee of returns.
  • ** The official name of the fund is: Aquila Capital Renewables Fund III S.A., SICAV-SIF
  • *** Investments in foreign currencies possible as per country allocation

Risk Evaluation

Construction risk

Primarily the risk that it may not be possible to construct a renewable energy project as planned. This may cause cost or time limits to be exceeded or the project to fail completely.

Technological risks

Includes all risks the construction and operation of a renewable energy facility entails, which may be a primary cause of production stoppage or impairment of the safe construction and operation of a facility. This includes the risk of a shorter than expected lifetime for technical plants and the risk of reduced output and production due to technical failure as well as the risk of defects and damage, including the risk of excessive wear on technical equipment. Technological risks include the risk that technical progress may cause equipment to become less competitive or obsolete.

Resource and production risk

Includes the risk of reduced output not due to technical reasons and an ensuing production stoppage. In the case of wind power and photovoltaic projects, this is the risk of there being lower than expected levels of wind or sun at a particular location.

Price and sales risk

The price and sales risk for renewable energy projects concerns the risk of fluctuations in electricity prices or other remuneration (such as that received for the sale of green electricity certificates) where electricity prices and/or certificate prices are not fixed by law and are subject to changes.

Legal and regulatory risk

The risk of retroactive changes in laws, taxation and actual administrative practice which affect operation of a renewable energy project and, in particular, the purchase of and payment for electricity generated. Renewable energy projects are typically long-term, location-bound infrastructure projects; therefore, there is a higher level of dependency on political stability and the reliability of the legal system and the administration in the country where the facilities are located. This is especially true because renewable energy projects are usually economically dependent on public subsidies. In the past, tthere have been retroactive interventions in the regulatory and subsidy regimes with respect to renewable energies in a number of countries.

Interest rate risk

If floating rate debt capital has been used, debt servicing becomes more expensive if interest rates rise. This applies also if additional debt capital has to be used. The general level of interest rates, in particular, the level of the risk-free interest rate, which is used as a valuation parameter, influences strongly sales proceeds upon exit.

Currency risk

Fluctuations in exchange rates affect the value of investments made in foreign currencies. The Aquila® Renewables Fund III is denominated in euros and is able to make investments in foreign currencies. Currency hedging at the legal structure level will not be performed.