Invicta fund to finance Scottish biomass power plants

LONDON, Nov 9 (Reuters) - Invicta Capital has launched a fund aiming to raise 300 million pounds ($498 million) to invest in nine biomass plants in Scotland that will produce up to 90 megawatts of energy, it said on Monday.

While Invicta has raised 1.3 billion pounds on previous projects since it was founded in 2001, the new scheme will be the first to target institutional money in addition to high net worth individuals.

The fund is unusual among renewable energy vehicles because it has specified the form of technology as well as identifying sites where it will set up power plants.

The plants will produce enough power to supply 140,000 homes using biomass technology whereby organic material is cooked in a low-oxygen environment to produce gas used to generate electricity.

Niall Bamford, managing director of Invicta, told Reuters the targeting of institutions followed a process of pre-sounding potential investors seeking exposure to renewable energy.

Contracts for both the fuel supply and energy produced are already in place and the fund will aim to pay a net annual return of 8 percent, Bamford said. "We can properly forecast what the profitability of the plants is going to be," he said.

At the end of a five-year term, the fund will seek a trade sale or capital markets transaction involving bank debt or an IPO to return funds to investors, Bamford said.

The power generated will be eligible for so-called renewable obligation certificates, issued by the government to accredited generators, that can be traded. (Reporting by Chris Vellacott; Editing by Dan Lalor) ($1 = 0.6025 pound)