Wednesday 12 September 2018 4:10 pm

John Laing environmental fund to raise up to £100m through share issue


Infrastructure investment group John Laing is raising up to £100m for its environmental assets fund in order to target further diversification.

Recent acquisitions of three anaerobic digestion projects, which now represent 17 per cent of the fund's portfolio, were made using the company's revolving credit facility which is now "substantially drawn down."

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Funds raised will allow the fund to pay the revolving credit and invest in future opportunities across anaerobic digestion – the break down of biodegradable material to produce biogass – Waste to Energy assets and biomass plants to further diversify income streams.

The company is targeting £50m, but could raise up to £100m, through a share placing, subscription and intermediaries offer at a issue price of 102p per share.

John Laing Capital Management director Chris Tanner told City A.M: "We're targeting £50M in response to recent success that we have had in the anaerobic digestion sector, as we have made a number of investments in that space.

"It's a diversified fund across wind, solar, waste and water and now anaerobic digestion, so that there's the broadest spread across renewables.

"The fund benefits from the diversification as we are not reliant on any one energy resource, the wind blowing or the sun shining.

"If you think about this summer, it has been good for solar but wind speeds have been right down, but back in 2017 it was the opposite.

"Anaerobic digestion just increases that diversification of risk and the returns are higher than for wind and solar as well."

The fund investment policy is to invest in "environmental infrastructure projects with long-term, predictable, wholly or partially inflation linked cash flows supported by long-term contracts or stable regulatory frameworks."

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