First Green Capital invests in Germany’s green energy
Sustainable energy holds the future. This is particularly true for Germany, where nuclear power stations will be a thing of the past come 2020 thanks to the ‘Ausstieg’, Germany’s policy of phasing out nuclear energy. Moreover, it is Europe’s aim that 20% of the energy production will be sustainable in 2020. First Green Capital is taking advantage of this fact by helping to get sustainable energy projects off the ground in Germany. The first project – a solar project with a capacity of 1.1 megawatts – has already been completed.
On 30 June 2011 the largest solar panel roof of Berlin was completed. The roof measures 22,500 m2 and has been realized by the largest German removal company Zapf. First Green Capital built an installation there consisting of 4,536 solar panels with a total capacity of 1.1 megawatt peak (MWp). “That is enough to provide 300 families with energy,” explains Zanders consultant Joost Berkvens. First Green Capital is renting the roof from Zapf for 25 years. First Green Capital is investing in Germany because the German government wants to succeed in its stimulation of sustainable energy.
“In Germany the same number of solar panels is installed in one day as are installed in one year in the Netherlands”
“In Germany the same number of solar panels are installed in one day as are installed in one year in the Netherlands,” says Jurjen Algra of Greenchoice, investor in First Green Capital. “The Netherlands can take this as an example when it comes to sustainable energy.” Investing in German green projects is therefore very interesting. Joost Berkvens says: “The life cycle of solar panels is approximately 25 to 30 years. The risks involved in an operational project are minimal, whereby you already know that such a project will provide a reasonably steady cash fl ow for the coming period. The cost price of solar panels is relatively high at the moment. Developments are moving fast, however, and you will soon see the price of the panels fall quickly, at the same time as their power increases. This makes solar projects very interesting as investment properties.” First Green Capital is ambitious. The joint venture will be installing over 100 MWp in power during the coming four years. The focus lies on solar projects at the present time, because they require a relatively short development process.
Zanders is closely involved in this project. The organization has built up a broad knowledge over the past few years in the areas of fi nancing, investment and risk management involved in sustainable energy projects. Berkvens notes: “We know the market and we have guided many clients in this area.” Zanders has been involved in the sustainable energy market for years and also advises operators and project developers on hydropower, biomass and wind energy.
The project in Berlin was a pilot. The enormous installation was realized from one small offi ce in the same city. The daily project management is run from that offi ce. “The offi ce only has a couple of desks,” laughs Berkvens. “But the diff erent parties who participate in First Green Capital have their own people, strengths, knowledge and networks, of course. We kept the costs as low as possible because we want all the money to go to the projects. And we succeeded. With very limited means we have achieved an impressive result. I really believe this pilot to be a proven success. We have been able to show that the approach used by First Green Capital actually works.”
Looking for locations
First Green Capital is now busy developing follow-up projects and is looking for new locations for solar projects. According to Berkvens, the preference lies particularly with locations in the east of Germany, because there are more plots of land there with limited alternative uses. “We are looking for plots of land that are not suitable for farming. Redevelopment sites, for example, or excavation sites. Once you’ve found a suitable plot of land, you then have to fi nd out whether you can get the right permits and whether it’s possible to lease the land. We soon found out that this is quite easily arranged in some regions, while it can be far more diffi cult in other regions. I’ve come to realize that there are very diff erent attitudes towards sustainable energy in Germany’s diff erent regions and the process of getting a permit takes far longer in some areas than in others.”
“We have been able to show that the approach used by First Green Capital works”
In order to keep taking new steps, First Green Capital is now looking for investors. “The capital is adequate for the time being. But in order to achieve a greater scale, we’ll need to expand our investment basis,” says Joost Berkvens. “This is what we are concentrating on now.” Berkvens continues: “Germany may be large enough, but we are still looking at other countries. First Green Capital has the potential to become a big player in the energy market.”