RTR is a leading Italian solar energy business
Rete Rinnovabile (‘RTR’) was acquired by Terra Firma in March 2011 from Terna, the Italian national high-voltage electricity grid operator. RTR is a solar photovoltaic (‘PV’) energy generating company with a significant portfolio of production sites throughout mainland Italy, Sicily and Sardinia. It is one of Italy’s leading solar energy generation business.
Asset-Backed: RTR has a portfolio of high quality, newly-constructed plants in 132 locations across Italy. Around 80 per cent of RTR’s revenue is fixed under a 20-year ‘feed in’ tariff set by the Italian Government.
Requiring Fundamental Change: In a young and fragmented industry, RTR offered the opportunity to build a market-leading business through consolidation and professional management.
- From a group of orphaned assets, RTR has been developed into one of Europe’s leading renewable energy businesses through a ’buy and build’ strategy. Terra Firma’s previous experience, through its investments in Infinis in the UK and EverPower in the US, has enabled the establishment of best-in-class processes and systems to professionalise operations.
- RTR was an asset-only acquisition. Terra Firma put in place staff, systems and corporate headquarters, and recruited a top management team to work with Terra Firma to scale the business quickly and effectively.
Developing through capital expenditure
- RTR has made significant investment in upgrading the effectiveness of its infrastructure. In 2012, it installed an improved remote monitoring system and central control room to improve information and further optimise its operations. The business has invested in a number of initiatives to increase the operating efficiency of its solar plants, including panel tilt adjustments, wiring changes, surface analysis to identify hotspots and trials of dirt repellent sprays.
Building through mergers and acquisitions
- Since the initial acquisition, RTR has acquired a further eight portfolios which have more than doubled its installed capacity from 144 MWp to 332 MWp. By the end of 2016, RTR had the capacity to produce over 450 GWh of electricity per year. The business has established itself as a key player in the consolidation process of the Italian PV sector.
Lowering the cost of capital to create extra upside
- Operating risk has been reduced through developing high quality in-house asset management, monitoring teams and a long-term contract with Terna, the Italian national grid operator, for the maintenance of the existing PV installations, including guarantees on equipment and production capacity.
- RTR is also being de-risked through growing the scale of its business, which together with its high level of cash generation puts it in a good position to negotiate with banks and counterparties.
Status of Investment: The RTR investment is unrealised.