The INVL Renewable Energy Fund I managed by INVL Asset Management, the leading asset management company in Lithuania, is beginning activities in Romania and plans to invest approximately EUR 120 million in the development of solar farms it has acquired.
Under agreements that have been signed, the fund has acquired two companies which are developing solar power plants with a capacity of 166 megawatts (MW) in Romania.
“We are growing and diversifying the geography of the portfolio. Romania is a very rapidly developing and promising European Union market which is giving increasing attention to green projects. We see huge potential in this market for developing renewable energy projects and we believe that these investments of ours will not only reduce pollution of the environment but will also allow us to earn an attractive return for investors,” says Liudas Liutkevičius, Managing Partner of the INVL Renewable Energy Fund I.
The solar energy projects in Romania that are being added to the fund’s portfolio already have approved grid connection conditions. The solar plants, in which the fund plans to invest roughly EUR 120 million, should become operational in 2024.
“We constantly monitor electricity markets in EU countries and evaluate varied investment opportunities. We have been watching the Romanian market since the fund’s inception, but only went into action after the state amended electricity legislation to allow the development of power generation facilities on the basis of power purchase agreements, or PPAs,” Liutkevičius notes.
“The Romanian market is attractive for its geographical location and annual hours of sunlight – that makes it possible to achieve about 20% higher solar power plant efficiency comparing to Poland and increase the competitiveness of the electricity price in the market. The changed legislative environment will no doubt attract big investments to the renewable energy sector and enable Romania to address structural challenges related to its electricity production balance and energy independence,” he adds.
Electricity consumption in Romania last year totalled more than 60 terawatt hours (TWh), or about 5 times the level in Lithuania. Romania imports some of its electricity, i.e., it does not have enough domestically produced electricity to satisfy demand. It is a nuclear energy country, but planned upgrades of nuclear power plants in the next few years mean that some reactors will have to be halted.
“Renewable energy is clearly an effective way to increase any country’s energy independence, security and resilience to commodity price shocks. We plan to invest more in sustainable energy projects in Romania. That will create opportunities to work together with renewable energy project developers. The fund’s managers are also actively expanding the portfolio in other markets,” the managing partner of the INVL Renewable Energy Fund I says.
Under the INVL Renewable Energy Fund I’s investment strategy, investors’ money is being put to work in renewable energy projects (on-shore wind and utility-scale solar farms) in EU territory. The fund is currently focusing on Central Eastern European countries, where it sees big growth potential.
After the acquisition in Romania, the fund’s portfolio includes development projects for more than 200 MW of solar farms. All the projects already have conditions for grid connection. Construction of the solar farms will take place in 2023-2025.
About the INVL Renewable Energy Fund I
This sub-fund for informed investors established by INVL Asset Management on 20 July 2021 invests in renewable energy projects (solar and wind) at the early and mid-stage of development, including construction of new power plants, development and/or acquisition of the infrastructure necessary for the operation of power plants, and effective management of existing power plants in the European Union and member states of the European Economic Area.