Ecofin to double the €132m it invested in Airtricity

British fund manager Ecofin will double the €132 million it invested in wind power group Airtricity as a result of last week's deal with Scottish and Southern Energy (SSE).

Airtricity's shareholders agreed last week to sell its European business to SSE in a deal valuing the wind energy group at €1.46 billion.

The agreement follows the sale of its US operations to German utility Eon for €1 billion.

Ecofin, an investment fund that specialises in backing alternative energy and "green" enterprises, holds 14.78 per cent of Airtricity for which it paid €16.43 a-share or €132 million.

The company said this week that "the proceeds of the sale of Airtricity are expected to be approximately €33 a-share, subject to some closing adjustments".

That price will realise just over €265 million for the investment fund when the deal goes through before the end of March, meaning it will have doubled its money in the 17 months since it first invested in Airtricity in August 2006.

Meanwhile, ratings agencies Moody's and Standard & Poors have reacted to the deal by putting SSE on credit watch.

Moody's has indicated that it may re-rate some of Scottish and Southern's debts as a result of the Airtricity transaction, a move that could result in it paying higher interest rates.

SSE is borrowing the money to finance the deal, and the agencies have expressed concern at the fact that Airtricity is still a developing business and is not profitable. Also, there is a considerable cost involved in building the company's proposed wind farms.

Scottish and Southern itself has said that it expects to wait until 2011 before the deal is "earnings enhancing".