Greencoat Renewables seeks secondary listing on JSE’s Alternative Exchange

Greencoat Renewables, an owner and operator of renewable energy infrastructure in Europe, is applying for a secondary listing on the JSE’s Alternative Exchange, with a listing planned for later this year.

The company, already listed in London and in Dublin, Ireland, has a market capitalisation of approximately €850 million (R17.23 billion) and its operations span five European jurisdictions, including wind farms, solar farms, and battery storage assets.

As evidence of its growth, the company started out with only one energy asset in Ireland in 2017, the chief financial officer Diarmuid Kelly said in an interview. Its share price in London on Tuesday was €0.77.

“Rapidly growing commercial demand for clean energy, accelerated by the hyper-scaling of AI and data centres, is supporting existing political support for the energy transition, with the EU looking to hit a minimum target of 42.5% of energy from renewable sources by 2030, up from 24.5% in 2023,” said Schroders Greencoat Partner Paul O’Donnel.

The company on Tuesday also announced the sale of six Irish onshore wind assets for €139m and €17m in non-contingent deferred consideration over 2026 and 2027, with the proceeds to be used to reduce debt and bring gearing down from 54% to 51%.

“Our business model is simple. Our assets convert wind and solar irradiance into clean electricity that we sell into the grid or directly to off-takers. We generate cash that we distribute to investors quarterly, as part of a progressive dividend policy. Our dividend cover allows us to reinvest excess cash into the business to grow the portfolio, which, in turn, provides an underpin to the net asset value,” said Schroders Greencoat Partner Bertrand Gautier.

Greencoat Renewables is managed by Schroders Greencoat, an investment manager in the listed renewable energy infrastructure sector.

Kelly said the company does not plan to physically invest in South Africa through the listing, as its business is in Europe. The listing in South Africa is intended to diversify its shareholder base, position itself to take advantage of growth opportunities as market conditions evolve, and enhance liquidity.

He said they had done a roadshow with institutional investors in South Africa in September last year and had gained a good understanding of the local institutional investor appetite that might be available to Greencoat Renewables.

For South African investors, the secondary listing on the JSE could provide access to an investment that owns hard, fast-growing assets in Europe and generates growing dividends in hard offshore currency, Kelly said.

No new shares will be issued or placed as part of the listing, and the company will remain listed on the Alternative Investment Market in London and the Euronext Growth Market in Dublin.

“The business has a huge growth opportunity ahead of it as Europe continues to materially increase its renewable generation capacity, as climate and energy security considerations increase,” said Kelly.

Greencoat Renewables’ electricity generated by its renewable energy assets is sold to national grids and to companies through commercial power purchase agreements (PPAs).

By acting as a long-term owner of renewable energy assets, Greencoat Renewables allows developers to recycle capital and enables investors to participate in the European energy transition while accessing attractive returns, a statement said Tuesday.

The company’s portfolio benefits from either government-backed tariffs or liquid merchant markets. In its first eight years, it has grown the portfolio to 40 assets and generates enough energy each year to power approximately 750 000 homes.

The business has increased its dividends for seven consecutive years, and expects to continue that trajectory going forward, said Kelly.

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