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    Valorem is a leading independent renewable energy development and operating company. It is one of the largest onshore wind developers in France, having developed over 480MW of capacity over the last 10 years.

    The French power market is experiencing a major transition as it looks to reduce its reliance on nuclear generation and to increase generation from renewable sources of energy such as wind and solar. The energy transition has been continuously supported by the French governments over the past decade. With in-house capabilities across the entire project cycle and a strong local footprint, Valorem is well positioned to benefit from this shift in energy mix.

    Developments in the year

    Valorem had a good financial year with revenue from electricity generation above budget, 117MW of projects becoming operational and 160MW of projects closed. Since acquisition, the company has now increased its asset base by 2.5x, owning 436MW of fully developed renewable capacity as of February 2020 compared to 179MW in September 2016. Valorem’s operational portfolio is relatively young, with an average residual feed-in-tariff life of over 12 years.

    Valorem has built an impressive future pipeline of 3.5GW of wind, solar and hydro projects across European geographies, of which 1.5GW is at an advanced development stage. The development of this pipeline into operation will drive future value growth.

    Valorem continues to focus on the conversion of its pipeline in France, on larger wind and solar projects, and a successful diversification into hydro, fostered by the acquisition of FHA in July 2019.

    In April 2019, following a wide auction, Valorem sold 90% of a Finnish project totalling 71MW. The rest of the Finnish pipeline continues to make progress.

    Regulatory and political environment

    Renewables benefit from strong support from the French Government, which has an objective of a 32% renewables contribution by 2032 coupled with a carbonneutral electricity mix by 2040. In line with the need to triple the current installed PV capacity by 2023, in December 2017 the Government announced an increase of future PV auctions from 1.45GW to 2.45GW per annum over the next three years.

    Investment rationale

    This investment diversifies the Company’s portfolio with exposure to a growing renewables business in one of the most attractive European markets, and access to recurring, inflation-linked cash flows underpinned by a robust regulatory regime.

    Led by its experienced management team, Valorem is a best-in-class developer, being the fourth largest French wind developer and the largest independent one. It has a significant pipeline of projects at an advanced stage of development that it expects to convert into operating assets, with further projects at earlier stages to bring through the development process.

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