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Downing Renewables & Infrastructure Trust raises £122.5mln to make initial investments

The trust will invest across solar, wind, hydro and geothermal and is targeting an initial dividend yield of 3%

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The first investment will be in a UK solar portfolio

Downing Renewables & Infrastructure Trust PLC (LON:DORE) has raised gross proceeds of £122.5mln as part of an initial public offer (IPO) in London.

The investment trust, which is managed by Downing LLP and will concentrate on renewable energy generating assets in the UK and Europe, priced its IPO at 100p per share.

In a statement, Hugh Little, chair of the trust’s board, said: “We are very pleased with the response we have received and the endorsement of our differentiated proposition from both institutional and retail investors. We are grateful to our new shareholders and look forward to delivering an attractive return for them over the coming years.”

Targeting an initial dividend yield of 3%, Downing Renewables & Infrastructure Trust will aim to deliver both a sustainable income stream and capital growth by diversifying the portfolio across wind, solar, hydro and geothermal assets, as well as by geography, project stage and revenue.

The trust will make an initial investment of £50mln in a seed portfolio of operational UK ground and rooftop solar projects with an average operating track record of six years, which generated underlying profits (EBITDA) of £9.9mln in the year to March 31, 2020.

Tom Williams, head of energy and infrastructure at Downing LLP, said: “The increasing demand for renewables, driven by broad political support for the transition to 'net-zero' emission economies, presents the ideal opportunity for the company and we are delighted to be launching DORE at this time.

“The company will be well-positioned to support the growing demand for renewable energy.”

He said Downing Renewables & Infrastructure Trust would proceed with the proposed acquisition of the seed assets and continuing to progress an identified £1.5bn pipeline, including £70mln of wind and hydro assets in Sweden and Norway where Downing has secured exclusivity or is in advanced discussions to secure exclusivity.

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