Energy Transition in the Nordics: – Strong international interest
– The Energy Transition in the Nordic and Baltic region is increasingly attracting international investors, says Justin Fitzhugh, Head of Energy and Infrastructure at Arctic Securities.
Arctic Securities, the leading Norwegian investment bank, is expanding from its onshore wind and hydro activities to bring capital into the new sectors of PV, P2X and EV charging.
According to Justin Fitzhugh, Arctic is looking to continue its activity in onshore wind, and to increase the number of solar PV, P2X and EV charging transactions as those markets expand in the Nordic and Baltic regions.
Those transactions will continue to consist of raising private and public development capital for growth businesses, and increasingly expand to raise equity and debt for the build-out of the assets themselves.
More sources of capital available
The Nordic region is undoubtedly a renewable energy powerhouse, growing in all five Nordic countries.
"We see strong international investor interest in the Nordics, in a wide range of technologies."
– We continue to see strong international investor interest in energy transition development businesses and projects in the Nordic region, in an increasingly wide range of technologies.
The public equity markets are also “coming back to life for the sector”:
– Obviously, this provides additional potential sources of capital, in addition to the highly active debt capital market.
Quality is key
There has been some element of a shakeout in the last couple of years. The businesses that we are seeing active today have proved their resilience and demonstrated their quality through tough times, according to Fitzhugh:
– In this environment, companies looking to succeed will focus on quality throughout their operations, ensuring that projects are well-structured and well-contracted. This requires good and experienced advice from financial advisors and others.
Plenty of appetite for deals
– What is you view on 2023, and what will 2024 look like for the E&I sector?
– Despite a difficult 2023 in the public equity markets, and a tough fundraising environment for infrastructure vehicles, we nevertheless saw plenty of appetite for the deals that we worked on across the space in the private market.
"Increased public market activities will provide more options for businesses in 2024."
– Some key factors to drive activity going forward will be the return to the historic trend of capital cost reductions in all sectors, an improving or at least stable cost of capital environment, and the role of governments in supporting technologies that are at an earlier stage, but strategically important for longer-term decarbonatization – from offshore wind to e-fuels.
– 2024 will be a more diverse year, with increased public market activities providing more options for businesses.
– A significant market presence
Justin Fitzhugh is the new Head of Energy & Infrastructure (E&I) in Investment Banking at Arctic Securities – covering the Energy Transition, E&P, and clean economy sectors. He replaces Harald von Heyden, who recently joined Norges Bank Investment Management (NBIM) as their Global Head of Renewable Infrastructure.
Looking ahead, Justin is excited to continue growing the team and the business:
– In the past four years, Harald built our E&I team dedicated to the green economy and Energy Transition. Today, the team has a significant market presence and deal track-record. I’m looking forward to building on the platform that Harald established and developing it even further.