MET Group has been working on building up a renewable portfolio for some time now. The focus is on photovoltaic plants and onshore wind farms. In an interview with energate, Renewables CEO Christian Hürlimann explains which projects he considers particularly interesting.
Original article: energate messenger
energate: Mr. Hürlimann, MET Group would like to build up a renewable portfolio totalling 2 GW for itself and its joint venture with Keppel Infrastructure (Keppel MET Renewables) by 2026. How are you financing this?
Hürlimann: MET Group has stable liquidity. We use this liquidity for our development projects. We decide on the financing of individual sites dynamically on a case-by-case basis, taking into account the different nature of the projects, revenue models and country-specific criteria. Based on this dynamic approach, we are, for example, constructing the Puerto Real 3 solar park in Spain with equity, followed by potential project financing after the official commissioning.
energate: When you buy projects, what stage of development do you prefer?
Hürlimann: If it is a good opportunity, the stage of development is not the most important aspect. We are far more concerned with project attractiveness, the corresponding risk and opportunity profile and how much the project contributes to our portfolio diversification. In principle, however, it can be said that we do not want to develop projects from scratch and ideally, we would get involved when the land is secured and the situation with grid access is also already relatively clear. On the other hand, we tend not to focus so much on projects that are already going into operation. As a rule, these are the most expensive projects and they are also widely tendered. With our trading floor behind us, we see interesting opportunities instead in plants with expiring feed-in tariffs. We took over our two Bulgarian wind projects in precisely this "sweet spot".
energate: How do you find attractive purchasing opportunities?
Hürlimann: Our asset origination team in the renewables sector, which is currently being expanded by two positions, currently consists of three people. One of them works from Romania, one from Bulgaria and one from Italy. This team and I have a large network. We use this to find attractive buying opportunities. Depending on the requirements and project characteristics, the origination team is supported in the background by other teams in the areas of transaction support with lawyers, M&A and valuation expertise, project development, engineering and construction management as well as asset management, electricity contracts and financial structuring. We try to do business bilaterally whenever possible. This is because, generally speaking, in addition to the increased transaction security for sellers and buyers, more attractive prices can also be achieved than in large tenders.
energate: But surely your project development team is bigger?
Hürlimann: In Hungary, we have our own project development opportunities. In all other countries, we do not have our own development teams on site, but we work with co-development agreements. In addition to our hub in Hungary, from which we mainly coordinate projects in Central and Eastern Europe, we are currently working on expanding our new hub in Milan. We already have a small team of three people there, which is now to be enlarged to six or seven people. With this hub, we want to be closer to our target markets in Western Europe.
energate: Do you also sell projects or are all projects for your own portfolio?
Hürlimann: Of course, we reserve the right to sell projects. This is what we did, for example, with the Italian projects that are now part of the portfolio of our joint venture with Keppel Infrastructure.
energate: You mentioned the Keppel MET Renewables joint venture. What is the purpose of this cooperation? Why is MET using two different vehicles to drive forward the targeted expansion of renewables?
Hürlimann: In principle, this is nothing special. Many developers and fund managers work with several vehicles in the background – and so do we. By establishing the joint venture with Keppel Infrastructure, we have created an additional investment vehicle that can be used for optimised capital allocation. In addition, this significantly increases our "firepower" in the area of investments in renewable energy in Europe. In geographical terms, we also do not have exactly the same focus. For our Green Assets Division portfolio, we are looking at photovoltaic installations and onshore wind farms across Europe, while Keppel MET Renewables plans to invest in these technologies mainly in Western Europe.
energate: So there is still a certain competitive situation in Western Europe?
Hürlimann: It may seem like that at first glance. But the fact is: we are the development partner for Keppel MET Renewables and offer the joint venture everything from project scouting and onboarding to development management, construction implementation and operational management of the plant. Each of our new projects in Western Europe meets both the investment criteria of MET Green Assets Division as well as those of the joint venture. We currently have several attractive projects in transaction which would fit well into our own portfolio within the MET Green Assets Division. Nevertheless, we will also offer these projects to Keppel MET Renewables.
energate: Who decides who ultimately takes over a project? Is it MET Group or Keppel Infrastructure?
Hürlimann: The cooperation between MET Group and Keppel Infrastructure is in principle very cooperative, as we work closely together on different levels and in different areas and want to further expand our cooperation beyond the joint venture. Based on this understanding of cooperation, the project allocation is coordinated between the two partners at a high level in each case.
energate: Could you tell us more about this?
Hürlimann: Keppel Infrastructure is keen to expand its operations in Western Europe with MET's support. In return, we also see them as a partner for the expansion of MET Group's business activities in Asia. This goes beyond the renewables business.
energate: What role does Switzerland play in MET's plans?
Hürlimann: We have had our headquarters here in Switzerland for over 10 years, but we do not currently play an active role in the Swiss energy market. But that is likely to change in the future.
energate: In which direction are you thinking?
Hürlimann: Opportunities could arise in the future both on the production side and on the sales side, in the key account sector.