Fresh windfarm deal is a gust of good news for Quayle Munro

Published Date: 15 September 2009
By Martin Flanagan
QUAYLE Munro, the Edinburgh-based merchant bank, has won the mandate to raise funds for a new £120 million windfarm in Norway as it sees a pick up in the drive to develop and invest in renewable sources of energy.
The company will advise on securing debt capital for the 70-megawatt windfarm, sited near Stavanger.This latest mandate follows the recent announcement of a similar contract in Scotland. The firm said it believed the deals showed a growing inclination by companies to push renewable projects on commercial as well as ethical grounds.The Norwegian windfarm is being built by Eurus, a global windpower developer majority-owned by Tokyo Electric Power. It will be on a greenfield site, with work starting next year and due to be completed in early 2011. Quayle Munro recently revealed it was raising £75m of project finance for a new 50-megawatt windfarm in Argyll being built by Carraig Gheal, a joint venture between Alloa-based GreenPower and state-owned Norwegian utility Statkraft. Royal Bank of Scotland, Lloyds Banking Group and Barclays were the appointed banks on that scheme, Quayle Munro said.Rob Cormie, Scottish managing director of Quayle Munro, said the group would be approaching UK and Nordic banks for capital for the new Norwegian windfarm later this year.He was confident of getting their support. "There's a feeling now that you can make lots of money from the renewables area," he said. "Economically there's value to be had from building windfarms and operating them."Some companies – the likes of Centrica, ScottishPower, etc – have been obliged to reduce their carbon levels. But people are now investing in windfarms and the like for the commercial benefits as well."Cormie said part of the reason for the popularity of investment in renewables was that they had increasingly kept their asset values in the financial markets.He added: "It's difficult to give precise numbers at this stage. But in Scotland there is an ever-increasing focus on renewables and this will become a significant part of Quayle's business." Quayle posted an 81 per cent fall in interim pre-tax profits to £617,000 from £3.2m last March, after it was hit by a £1.4m impairment charge in the value of its banking investments.Ian Jones, Quayle's executive chairman, said at the time that the lion's share of these investments were in RBS, Lloyds TSB and HBOS, the latter two now part of the Lloyds Banking Group. However, the company now believes that the climate is recovering and conducive to entrepreneurial investment, in renewables and across the wider picture.Cormie said: "There is value to be had with depressed investment levels. We are seeing more capital being made available for transactions and investments."