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Darby Infrastructure Fund becomes biggest shareholder in Korea’s largest wind farm

Darby Overseas Investments, the private equity arm of Franklin Templeton Investments, has announced that its Korea Emerging Infrastructure Fund has acquired a 32.4 per cent shareholding

Darby Overseas Investments, the private equity arm of Franklin Templeton Investments, has announced that its Korea Emerging Infrastructure Fund has acquired a 32.4 per cent shareholding in Gangwon Wind Power.

Gangwon Wind Power was established in 2001 to construct a wind farm in Gangwon Province in eastern Korea that is now the country’s largest and one of the biggest in Asia.

According to the Korea Power Exchange, Gangwon Wind Power had more than half of the country’s installed wind power capacity, as of the end of 2007. While total installed capacity in Korea has increased from 7.9MW in 2001 to 191MW in 2007, the Korean government has set targets to promote much higher levels of wind farm power.

‘This is a highly attractive investment for an infrastructure fund such as the Korea Emerging Infrastructure Fund,’ says David Hudson, Darby’s senior managing director for Asia and global infrastructure.

‘By virtue of its size, Gangwon Wind Power is in a strong position to expand even further by re-powering existing wind turbines or developing additional capacity. Of all renewable energy sources, wind power is one of the most efficient in terms of cost per unit of electricity generated.’

Recently, Darby made an investment in a wind- and hydro-power plant developer in India, which is a core part of Darby’s infrastructure portfolio and India’s first independent power producer.

In 2007, Darby invested in a rape-seed crushing plant in Poland that supplies rapeseed oil to the bio-diesel industry.

The Korea Emerging Infrastructure Fund is jointly managed by Darby and Hana Bank. It closed to new investors in 2006 at a total of KRW580bn (USD610m) in committed capital.

The fund makes private equity investments in, and extends mezzanine loans to, private companies engaged in a broad range of activities in the Korean infrastructure sector, including renewables, transportation, environment, logistics, energy and utilities.

The fund is managed by Darby Hana Infrastructure Fund Management Company, which is owned 70 per cent and 30 per cent by affiliates of Darby and Hana, respectively.

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