Ambienta to Sell Green Utility as Private Equity Exits IndustrySally Bakewell
Ambienta SGR SpA, a private-equity investor in resource and energy efficiency, plans to sell its stake in green utility ICQ Holding SpA in the latest sign the industry is losing funding as governments withdraw support.
Ambienta plans to complete the sale of 23 percent of Rome-based ICQ by the end of the year, Chief Executive Officer Nino Tronchetti Provera said in an interview. The investor bought the stake in the biomass, hydro and solar-plant developer in 2008.
“We don’t get the growth that we would like, therefore we don’t get the returns we would like,” said Tronchetti Provera, who seeks 20 percent internal rates of return. “Renewable energy was a scalable business” that could expand until the financial crisis limited bank lending to operations, he said.
Private equity and venture-capital funding for solar, wind, biofuel and smart-grid startups sank 34 percent to $5.8 billion last year, according to Bloomberg New Energy Finance. Renewable developments that require upfront investments are vulnerable to withdrawals of support from governments seeking to cut deficits.
Ambienta is seeking to raise about 300 million euros ($400 million) with its second fund, investing in water recycling and filtration, efficient gas and power equipment and electronics used in electricity generation, Tronchetti Provera said.
“We decided not to invest in any capex intensive business that was not scalable nor in any business that would rely so strongly on incentives,” he said in London.
Amplio Filtration Group, a water treatment company, Tower Light, a maker of lighting towers, and MBA Polymers Inc., a recycled-plastics producer are among Ambienta’s investments to date. They posted an average 26 percent gain in sales last year and added 460 jobs over four years, Tronchetti Provera said.
The investor raised 217.5 million euros with its first fund, Ambienta I, which was mostly spent on nine investments.