Story published by Clayton Reynolds in Merger Market on July 9th, 2011
INDI Fund in advanced discussions with investors and development banks, source says
• Spain, US, Canada, Sweden and Netherlands-based renewable energy companies are potential investors
• Fund plans to invest USD 40m to USD 90m each in nine renewable energy projects throughout Latin America
INDI Fund, a Washington, D.C.-based private equity fund, is in advanced discussions with potential European and North American strategic investors in the planned USD 400m Fund, according to a source familiar with the Fund’s operations. The USD 400m will consist of both debt and equity.
INDI is negotiating with one Spain-based, one US-based and more than one Canada-based renewable energy company, said the source. The Fund is also anticipating discussions with a Sweden-based and a Netherlands-based company, the source added. INDI Fund expects around three or four companies to invest USD 5m to USD 10m each in the Fund, with the rest of the USD 400m in capital coming from other sources, noted the source.
Wilmer Hale and an unspecified firm with significant experience in project finance, infrastructure and renewable energy in Latin America is advising INDI, said the source.
The Fund plans to invest USD 40m to USD 90m in each of the nine renewable energy generation projects it is developing in Chile, Colombia, Mexico, Peru, Panama, Ecuador, and Nicaragua, said the source. The projects involve hydroelectric, biofuel, wind, wave, solar and geothermal energy generation methods, the source added.
The Fund is also negotiating with institutional investors, including pension funds, and private investment funds, the source said. Furthermore, the Fund has been in discussions with the United States’ Export-Import Bank and is currently in talks with the Overseas Private Investment Corporation (OPIC) and various development banks, including what the source characterized as Latin America’s leading development bank.
INDI works with local communities to gain support for its projects, as this reduces the risk that a community might reject a project, which has happened with hydroelectric projects of significant value in Brazil and Costa Rica, the source pointed out. The Fund will also share project ownership, the source noted.
INDI will obey the typical private equity pattern which dictates selling portfolio investments within five to seven years with only some of its projects, said the source. Other projects will be ceded to the indigenous communities, while the rest will be sold with both INDI and indigenous communities acting as sellers, the source noted. Potential project buyers could include off-takers or private or state-owned operators, the source added.
INDI Fund’s founders are members of InTrust Global Investments, a Washington, D.C.-based consultancy and investment bank focused on Latin America, according to its website. InTrust’s advisory board features former Ambassador to Mexico James Jones, former Ambassador to Guatemala Donald Planty and former US government and World Bank adviser Julian Gresser, according to InTrust press releases. Jones and Gresser are current directors at Manatt Jones Global Strategies while Planty is a former Manatt Jones director, according to Manatt Jones and InTrust press releases. Manatt Jones is a Washington, D.C. business consultancy firm focused on Latin America and Asia, according to the firm’s website.