LONDON, UK: ThomasLloyd Energy Impact Trust (TLEI), a new closed-ended investment company established to invest in a diversified portfolio of unlisted sustainable energy infrastructure assets in fast-growing and emerging economies in Asia, announced its intention to launch an Initial Public Offering (IPO) to raise up to $340 million.
ThomasLloyd Energy Impact Trust will seek admission of the ordinary shares to the premium listing segment of the Official List of the Financial Conduct Authority and to trading on the London Stock Exchange’s Main Market.
The Investment Manager is ThomasLloyd Group, a leading impact investor and provider of climate financing. Founded in 2003 and with a history of sustainability in investment management and advisory, ThomasLloyd is one of the longest-established and most experienced investors in sustainable energy infrastructure in high growth and emerging markets in Asia.
The Company is targeting an annual dividend yield of at least 7% in respect of periods commencing after 1 January 2024, with the aim of progressively increasing the annual nominal target dividend in future periods.
Prior to this, TLEI is targeting an initial annual dividend yield of 2-3% in 2022, rising to 5-6% in 20233. The Company will target a NAV total return of 10-12% per annum (net of all fees, expenses and taxes) over the medium-to-long term.
TLEI has an investment objective of delivering a triple return, comprising a financial return on investment, a measurable environmental return and a discernible social return by investing in a diversified portfolio of unlisted sustainable energy infrastructure assets in the areas of renewable power generation, transmission infrastructure, energy storage and sustainable fuel production in fast-growing and emerging economies in Asia.
TLEI is expected to qualify for the London Stock Exchange’s Green Economy Mark at Admission, which recognises companies that derive 50% or more of their total annual revenues from products and services that contribute to the global green economy.
As a fund that has sustainable investment as its objective, the Company is also expected to qualify as an Article 9 fund under the EU Sustainable Finance Disclosure Regulation (SFDR).
The Company has engaged Shore Capital as Sponsor, Global Co-Ordinator and Sole Bookrunner.
Asia’s 4.6bn people account for more than half of global energy consumption – 85% of that consumption is from fossil fuels. Carbon emissions in Asia are now greater than Europe and North America combined.
Economic and population growth, together with rapid urbanisation, in Low Middle Income Countries (“LMIC”) in Asia is driving huge demand for funding to develop and upgrade existing energy infrastructure.
The average ‘carbon cost’2 of GDP (being the amount of carbon released in proportion to the generation of US$1 of GDP) in Asia is almost four times as high as that of the four largest economies in Europe, making investment in Asian renewable energy vital to achieving a Net Zero world by 2050.
The Company believes that private capital will play a critical role in closing the funding gap in the expected c. US$1 trillion funding shortfall for current infrastructure investment spend across India, the Philippines, Indonesia, Vietnam and Bangladesh.
T intends to provide investors with an attractive level of dividend income and the prospects of dividend growth and capital appreciation over the long term, delivered with low volatility and uncorrelated to other asset classes and also offers geographical portfolio diversification to investors who already have exposure to infrastructure assets in developed markets.
Sue Inglis, Chair of ThomasLloyd Energy Impact PLC, said: “ThomasLloyd Energy Impact Trust is an agent for urgent change, focused on delivering sustainable energy infrastructure in fast-growing Asian markets. Demand for energy in Asia is profound and set to rise in the coming decades. Asia is home to 60% of the world’s population and the challenge of CO2 emissions in Asia is becoming ever more pressing. Investing as usual will not get us to Net Zero.
With a target NAV total return of 10-12% per annum, the Company will provide Shareholders with an attractive level of dividend income and prospects for dividend growth and capital appreciation over the long term. Critically, the Company will also help to reduce global greenhouse gas emissions, while delivering economic and social progress – a critical triple return. The Investment Manager is highly experienced, with an outstanding track record of delivering investment returns combined with genuine and tangible positive impact.”
Michael Sieg, Chief Executive Officer of ThomasLloyd, said: “Asia is the world’s largest and fastest growing consumer of energy, but it is also the largest emitter of carbon dioxide; it is critical for the future of the world that we address this. The fact that the average ‘carbon cost’ of GDP in Asia is four times as high as that of the four largest economies in Europe, means that investment in renewable energy in Asia is vital to achieve a Net-Zero world.
The need for more sustainable energy has also created an unprecedented investment opportunity. Now is the time to deploy capital and secure attractive returns while making a fundamentally positive contribution to the environment.
We are confident that with our identified pipeline of seed assets we can put the capital we raise to work rapidly and make a real impact on improving the environment and reducing emissions, having a positive impact on local communities through the creation of direct and indirect jobs – which has a significant multiplier effect while delivering appealing returns for our investors.”