Egypt's EFG Hermes Holdings said its private equity arm bought a 49 per cent stake in wind power firm EDPR France for $208 million, according to a statement on Wednesday, its first investment outside the Middle East and Africa.

The buyout consists of the equity in the firm as well as paying back loans made by previous shareholders. About half of the cost will be funded through an acquisition finance facility secured from European banks, the Egyptian investment bank said.

EFG will provide seed capital of about $5 million for the equity component of the transaction, with the remainder raised from the Gulf, it added without providing details.

Completion of the transaction, which EFG said marked the launch of its "direct investment strategy", is subject to regulatory approval and other conditions.

EDPR France has a portfolio of 33 operational wind farms with a combined gross capacity of 334 megawatts and is a subsidiary of Portugal's EDP Renewables, according to the statement.

It will retain operational control of the wind farms, while EFG will manage the investment vehicle.

“Our first investment beyond the borders of the Middle East and Africa is a natural outgrowth of our emphasis on infrastructure private equity and, moreover, marks the launch of our direct investment strategy,” said EFG Hermes co-chief executive officer Karim Awad.

“Our interest in infrastructure investing generally — and in renewable energy in particular — reflects our aim of being catalysts for sustainable development while simultaneously generating attractive returns for our shareholders and co-investors alike.”

“We are delighted to enter into a partnership with such a reputable global player in renewables. EDPR has an outstanding track record and is widely known in the industry for its operational excellence,” said Karim Moussa, head of Private Equity at EFG Hermes.

“We’ve recently seen a strong surge in investor appetite for cash-yielding renewable assets, mainly driven by the prevailing low interest rate environment. This deal underlines our capability to transact swiftly and allocate capital from Mena to an attractive global asset class.

“EDPR France’s asset portfolio offers a strong dividend stream and healthy risk-adjusted returns for the investors,” Moussa added. – TradeArabia News Service and Reuters