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Terra Firma plans $5 billion energy fund

  • Terra Firma is planning a multi-billion dollar fund with a Chinese bank to invest in renewable energy.

    The private equity firm led by high-profile dealmaker Guy Hands along with China Development Bank are expected to start raising between $3 and $5 billion in the next few months, according to a person familiar with the matter.

    China Development Bank will market the new fund to potential investors in China, while Terra Firma will be on the lookout for backers in Europe and the United States.

    The deal provides Hands an opportunity to repair the firm’s reputation following the loss of music group EMI to Citigroup last year after Terra Firma defaulted on loans from the lender.

    Terra Firma already owns three renewable energy companies: landfill gas producer Infinis, U.S. wind farm group EverPower and Italy's leading solar power generator Rete Rinnovabile.