Ecofin US Renewables Trust plans $250m IPO

Ecofin US Renewables Trust plans to raise $250m by means of an initial public offering on the London Stock Exchange.

The sale will include an initial placing and an offer of subscription with the funds to be invested into a mix of renewable energy assets in the US supported by public incentives and fixed long-term revenue contracts extending from 10 to over 15 years.

Management is targeting a net total annual return of 7.0-7.5% with a "sustainable" yearly dividend yield of 5.25-5.75%.

A total of $61m will be invested in a 'seed' portfolio comprising four solar investments with a weighted average life for their Purchase Power Agreements or 18.7 years.

Two of the seed assets were already operational and the remaining two by the end of the same year, although the fourth might not do so until the first quarter of 2021.

Proceeds from the IPO are expected to be substantially comitted within 12 monhs from admission to trading.

Ecofin will also enjoy access to its investment manager's, Ecofin Advisors, active pipeline of opportunities, including $3.0bn across 86 transactions.

It will also have the financial strength of its parent company, TortoiseEcofin Investments, which had $7.0bn of assets under management.

A fund managed by Capricorn Investment, a long-standing strategic partner of Ecofin Group, has agreed to subscribe for 5% of the shares upon admission.