Well known oil trader Vitol has teamed with privately-owned renewable energy investor Low Carbon for a Jersey-based fund, VLC Renewables, that will focus on generating investment in renewable energy.
With an initial €200M (US$234M) allocation, the fund will invest in European renewable energy generation projects, including offshore and onshore wind.
The companies said they will invest in projects at various stages of the development cycle, including late-stage development, construction and operation.
The fund builds on Low Carbon’s expertise in renewables and Vitol’s understanding of energy markets and commodity flows. The initial €200M has been committed by Vitol, and investment opportunities may be offered to third parties.
Low Carbon chief executive Roy Bedlow said, “We are very pleased to close this new fund. Partnering with Vitol, one of the largest energy companies in the world, will enable us to drive scale in the investment and development of clean energy.
“At its core, Low Carbon is committed to tackling climate change and reducing carbon emissions through its long-term investments into the green infrastructure space. We firmly believe it is possible to provide all the energy we need through renewable sources, and this fund will help us further our ambition.
“The market has a good mix of proven low carbon technologies and we are seeing strong deal flow for investments across our target sectors. We look forward to working with Vitol in identifying and closing new green infrastructure investments.”
Vitol investment director Simon Hale said, “By 2025 almost 27% of European electricity will be generated from wind and solar. As a major participant in Europe’s power markets and as a significant investor in energy infrastructure worldwide, Vitol is keen to build a portfolio of renewable investments to complement its existing activities.”
Vitol is said to be the world’s largest independent company of its type and recently also invested in energy storage with Low Carbon, when VLC Energy, part of Vitol group, announced the completion of the UK’s largest portfolio of utility-scale, enhanced frequency response battery storage sites. The battery sites are intended to support grid flexibility and increase reliance on low carbon forms of electricity generation.