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Italian wealth fund plans green expansion

November 26, 2010

By Guy Dinmore in Rome, published: November 26 2010

An Italian wealth management fund controlled by the Pallavicini family, best known for owning one of Italy’s most extensive private art collections, is planning a major expansion into Europe’s renewable energy sector through its controlling shareholding in Denmark’s Greentech, a wind farm operator.

Sigieri Diaz della Vittoria Pallavicini, the head of the aristocratic family’s GWM Renewable Energy company, told the Financial Times he was planning to invest a total of €2bn, with the goal of bringing total capacity between the two renewable companies to 1,000 megawatts in less than three years in the wind and solar sectors.

One of his first acts since taking over as chief executive of Greentech earlier this month, in which GWM holds a stake of nearly 30 per cent, was to sort out its entanglement with a mafia-related investigation in Sicily which has highlighted the suspected penetration of organised crime into Italy’s subsidised renewables sector.

As part of the investigation, Italian police in September seized assets valued in total at €1.5bn believed to belong to Vito Nicastri, a Sicilian businessman suspected by prosecutors of being close to a fugitive mafia boss. Mr Nicastri, who has not been charged, denies any links to organised crime or any wrongdoing in the solar and wind projects he has developed and were later sold on to international companies.

Among the assets seized was a 15 per cent holding in a wind farm that Greentech, which is quoted on the Danish stock exchange, had acquired from Mr Nicastri. Mr Pallavicini said Greentech had bought the 15 per cent stake from Mr Nicastri last May and that the courts had made a procedural mistake in identifying that shareholding as still belonging to Mr Nicastri.

“Greentech has applied to unfreeze the shareholding. We are talking to the judges,” Mr Pallavicini told the FT.

Greentech had an image problem, he said. “We need to restore credibility and get away from this club of millionaires of ridiculous people.”

By the first quarter of next year, GWM Renewable Energy and Greentech would together have 200MW of wind power and 100MW of solar, Mr Pallavicini said. He plans to expand by opening to institutional investors by mid-2011 with a focus on projects in Italy, Poland and Spain, and possibly next in the US and India.

Shares in Greentech rose 13 per cent to DKr18 on Friday after the company announced it had completed a rights issue to institutional investors for DKr61.9m ($11m) which will help fund a second wind farm in Sardinia.

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