Germany-headquartered independent investment and asset manager KGAL is establishing a joint venture with Spain's Premier Group for its KGAL ESPF 5 impact fund. 

The Spanish partner is contributing its own domestic solar PV project pipeline to the joint venture for further development. KGAL provides financial, operational and strategic support.

KGAL, which manages investments of more than €16.5bn focuses its investments on long-term real capital investments for institutional and private investors in Real Estate, Sustainable Infrastructure and Aviation. 

The pan-European group was founded more than 50 years ago and is headquartered in Grünwald near Munich.

KGAL said in a statement on 8 December that Spain is experiencing a solar boom, due, in part, to ideal conditions such as the highest irradiation levels in Europe and large areas of available land.

In addition, it said solar energy costs have declined in recent years. This advantageous market environment has led to intense competition for grid connection capacities and the introduction of grid capacity auctions. 

KGAL and Premier are now joining forces to gain an advantage in tendering for grid capacities for solar parks. For the future, wind projects are also planned as part of the joint venture.

Michael Ebner, managing director of Sustainable Infrastructure at KGAL Investment Management said: "With this joint venture, we are involved in the value chain from the very beginning and can take advantage of all the opportunities offered by the attractive Spanish market. For KGAL ESPF 5, this means high return potential.

"Premier is our partner of choice, as we have been working together successfully and with confidence since 2018". 

KGAL has already cooperated with Premier Group on three large-scale PV projects in Spain with a total capacity of 287 megawatts. The two companies also launched a joint venture for the Italian market in Spring 2022. 

Premier Group was founded in 2006 and has since developed a total renewable energy capacity of more than 3.4 gigawatts from Brazil to Spain, Italy and Japan. 

"In Spain, high financial guarantees are a prerequisite for participating in grid capacity tenders. With KGAL's financial strength, we expect to make the most of the opportunities in our home market," said César Abad, CEO of Premier Group. "Equally important is KGAL's strategic support with its many years of experience, for example in assessing risks or in structuring and financing projects."

For KGAL ESPF 5, this joint venture is another milestone. Florian Martin, managing director and head of KGAL's client business, said: "With this fifth transaction since its launch in December 2021, our impact fund is maintaining its high investment pace. Further transactions in Southern and Central Europe are in the final stages." 

In addition to its broad geographical diversification, KGAL ESPF 5's investments also cover the entire life cycle from planning to operations.