Aquila European Renewables – Powering through

A number of factors appear to have combined to have a small negative effect on Aquila European Renewables’s (AERI’s) NAV and discount in recent weeks, including nerves about when interest rates will be cut, lower power prices, and the imposition of new taxes on renewables in Norway and Spain. These may be adding to the broader economic pressures that seem to have weighed on the shares over the past year, but the adviser observes that these are now mostly de-risked.

The entire renewable energy infrastructure sector has been affected by widening discounts and it could be argued that this has gone past the mechanical impact of rising rates. In the short term the company’s shares may reflect the trajectory of interest rates, however there is scope for sentiment to improve.