New company coming to the JSE

European energy infrastructure company Greencoat Renewables Plc (GRP) is seeking to list on the Johannesburg Stock Exchange (JSE) later this year.

GRP is a leading European renewable energy infrastructure company that is in the process of applying for a secondary listing on the JSE’s Alternative Exchange.

GRP owns and operates utility-scale energy transition assets in Europe. The clean electricity generated by these assets is sold to national grids and corporations directly through commercial power purchase agreements. 

“High structural cash generation supports a progressive dividend policy and material reinvestment into the portfolio in order to maintain the NAV in real terms,” the company said.

“By acting as a long-term owner of renewable energy assets, GRP allows developers to recycle capital and enables investors to participate in the European energy transitions whilst accessing attractive returns.”

GRP’s portfolio spans five jurisdictions in Europe. These regions have strong fundamentals and benefit from government-backed tariffs or liquid merchant markets. 

In its first eight years, the ‘Article 9’ fund has successfully grown the portfolio to 40 assets and generates enough energy each year to power approximately 750,000 homes annually. 

With a highly contracted portfolio of cash-generative assets, the company has increased its dividends for seven consecutive years and expects to continue that trajectory going forward.

A key differentiator for GRP is that, through its investment manager, it benefits from on-the-ground teams of experienced operational and financial asset professionals who are responsible for the lifecycle management of the company’s assets. 

In response to a marked increase in corporate demand for green energy, the company has successfully entered into a series of long-term power purchase agreements with various counterparties.

This includes businesses operating within the heavy industry and technology sectors.

GRP is managed by Schroders Greencoat LLP, an experienced investment manager in the listed renewable energy infrastructure sector. 

Greencoat’s opportunities

Bertrand Gautier and Paul O’Donnell lead the GRP team as co-portfolio managers, and Diarmuid Kelly is the Chief Financial Officer (CFO).

Gautier explained that GRP’s business model is simple – “Our assets convert wind and solar irradiance into clean electricity that we sell into the grid or directly to off-takers.” 

“We generate cash that we distribute to investors quarterly as part of a progressive dividend policy. Our dividend cover allows us to reinvest excess cash into the business to grow the portfolio, which, in turn, provides an underpin to the NAV.”

He said the business has a tremendous growth opportunity as Europe materially increases its renewable generation capacity, as climate and energy security considerations increase.

“Rapidly growing commercial demand for clean energy, accelerated by the hyper-scaling of AI and data centres, is supporting existing political support for the energy transition,” O’Donnell said.

He explained that the EU aims to achieve a minimum target of 42.5% energy from renewable sources by 2030, up from 24.5% in 2023.

“With a highly cash-generative asset base, disciplined approach to capital allocation, and a clear

strategic focus, GRP continues to be ideally placed to play a key role in this transition while delivering attractive yet stable, low-risk returns for shareholders,” he said.

GRP’s listing on the JSE is expected to become effective later this year, subject to the necessary regulatory approvals in South Africa, which the company said are well advanced. 

The company will not place or issue any new shares as part of the listing, and will remain listed on the Alternative Investment Market in London and the Euronext Growth Market in Dublin.

The company said its listing in South Africa is intended to diversify its shareholder base, position itself to take advantage of growth opportunities as market conditions evolve and enhance liquidity.