Denham Earmarks 20% of $3 Billion Fund for Renewable Energy

Denham Capital Management LP, a U.S. private equity firm investing in energy and resources, said as much as 20 percent of the $3 billion fund it closed on April 3 will be directed into renewable power companies.

Brazil will be a “key” market for the investor’s sixth fund, Scott Mackin, managing partner, co-president and head of power and renewables at Short Hills, New Jersey-based Denham, said yesterday in a telephone interview. It’s one of the few markets where wind energy is able to compete against new-build power stations.

“In Brazil, you’re competing against a new-build combined- cycle plant at $800 to $1,000 a kilowatt to build, with gas at $8 plus, so wind is very competitive in that market,” he said.

Brazil may become the world’s fourth-largest installer of wind farms this year, up from 11th last year, as some developed nations slash clean-energy subsidies. It may build wind farms with as much as 2,000 megawatts of capacity this year, trailing China, the U.S. and India, Steve Sawyer, secretary general of the Brussels-based industry lobby group Global Wind Energy Council, told Bloomberg News on Feb 7.

The investor is also looking at Eastern Europe for wind power investments, Mackin said. It tends to invest $50 million to $200 million in each company, typically over three to three- and-a-half years for each fund.

Investors in the Denham Commodity Partners Fund VI LP include public and private pension funds, sovereign wealth funds and family offices, based in the U.S., Europe and Asia. In addition to clean energy it will invest in power, oil and gas and metals and mining.

The fund already has invested $190 million for a majority stake in a solar-plant venture with Spain’s Fotowatio Renewables Ventures Inc. It will focus on Australia, South Africa and Latin America, the partner said.

“We now have an international solar platform with Fotowatio and it’s likely that we’ll invest in an international wind platform also to focus on the best wind opportunities globally.”

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