CANOPUS Foundation, Germany

CANOPUS Foundation provides business development assistance to social entrepreneurs in developing countries working in the field of clean energy technologies. One of its key areas of activity is the promotion and support of poverty reduction strategies through the use of sustainable and appropriate technology.

Peter Heller, Founder and Executive Director

Many foundations have been critically hurt by the credit crunch and subsequent financial crisis in the last 12 months. Asset values of European foundations dropped 20-30 per cent on average, and some have lost up to half the previous value of their endowment. The CANOPUS Foundation lost money too: € 90,000 on a Credit Linked Note containing Lehman Brothers products. This blow has given us a strong incentive to further pursue our asset management strategy aiming to avoid – as far as possible – conventional financial products. Today, CANOPUS and its related private equity company Forseo hold more than 40 per cent of their assets in European wind and solar parks as mission-related investments. These generate an average annual return of 6.5 per cent – net, as the foundation, a charitable entity under German law, is fully tax exempted.

Investments in solid sustainable energy projects provide a ‘real’ value that bank products cannot match today. If the hardware (wind turbines, solar PV systems, locations) is flawless and the developers have done a good job, the feed-in tariffs introduced by European governments provide a secured return for 20-25 years – and there is the environmental added value of producing clean energy and mitigating climate change.

A concrete example drawn from our portfolio is a €300,000 equity share in Orosolar, a closed solar PV fund released and managed by SAG Solarstrom AG, which invested in three Spanish earth-mounted solar parks and a large solar panel system on the rooftop of Volkswagen AG. The fund’s equity position is €5.8 million, which leverages a total investment of €32 million. Benefiting from the highly attractive previous feed-in tariff in Spain for all solar installations until September 2008, the fund offers the shareholders an annual return of 9 per cent, fully distributed as a running dividend from year 1. Thus CANOPUS is guaranteed a safe return of €27,000 per year from this asset for the next 20 years and has the option of an additional upside when the solar parks are sold with a surplus afterwards.

We are now proactively developing similar investment opportunities for ourselves and other foundations in close cooperation with project developers, banks and fund managers. The demand for this type of ‘real value’ asset with a high social or environmental impact has risen sharply in the current crisis, and foundations are more responsive than ever to the idea of reinvesting their capital … where their heart is and where they get their good money back.

For more information
www.canopusfund.org
info@canopusfund.org