Bloomberg News

Munich Re Sees ‘Window of Opportunity’ in Spanish Solar Plants

October 13, 2011

Oct. 13 (Bloomberg) -- Munich Re, the world’s biggest reinsurer, said investments in Spanish solar plants are being offered at attractive prices by developers and banks, providing a “window of opportunity” for investors.

“Supply of photovoltaic plants in Spain clearly exceeds demand at the moment,” said Robert Pottmann, head of renewable energy and new technologies at MEAG, the Munich-based reinsurer’s asset manager. “This is a window of opportunity offering pretty attractive returns to investors.”

Munich Re plans to invest 2.5 billion euros ($3.4 billion) in the next five years in renewable-energy assets such as wind parks and solar plants to help boost investment returns, management board member Thomas Blunck, who is responsible for special and financial risks, said in an interview in June.

“In Spain, there is currently a lot of deal flow from banks as well as from developers who want to sell finished plants to free up capital to build new ones,” Pottmann said.

MEAG purchased four photovoltaic plants in southern Italy from Fotowatio SL, Spain’s second-largest solar-park operator, in July for Munich Re. Fotowatio Renewable Ventures, as the Madrid-based solar company is known, sold the Italian units to allow investments in markets such as Australia, it said. Munich Re’s asset manager in July also bought a 37 percent stake in the Spanish and Italian assets of T-Solar Global SA, Spain’s largest operator of solar parks.

Fast-Track Projects

Bridge financing and project financing by banks aren’t affected by the current debt crisis and “these sources of financing are still available in many cases,” Pottmann said. MEAG hasn’t taken a closer look at investments in solar plants in Greece as “the bureaucratic approval process is still considered extremely tedious by some of the developers we are in contact with,” he added.

Greece, which pays Europe’s highest premium for solar power, said last month it will fast-track three solar photovoltaic projects with a total investment of 1 billion euros to help revive its shrinking economy and convince lenders it’s moving ahead with plans to reduce its debt burden.

“Currently, for photovoltaic, Spain, Italy and Germany are in the focus,” Pottmann said. “But with German 10-year government bonds offering yields close to 2 percent, a ready-to- use German solar plant offering internal rates of return of about 6 percent over 20 years also could be an attractive investment.”

--Editors: Stephen Taylor, Keith Campbell

To contact the reporter on this story: Oliver Suess in Munich at

To contact the editors responsible for this story: Frank Connelly at Edward Evans at

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