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Shares I love: Scatec

Scatec is tapping into growing demand for renewable energy
Shares I love: Scatec
  • Scatec is taking advantage of the rapid development of new markets for renewable energy
  • It plans to invest over £8bn to help meet demand for solar, hydro and wind energy

Francesco Conte, co-manager of JPMorgan European Discovery Trust (JEDT), explains why he continues to be optimistic about Norwegian renewable energy company Scatec (Nor:SCATC).

“One of the great attractions of European smaller companies is that the asset class includes many innovative and dynamic companies that are often leaders in their market niches and/or have high growth prospects that may be underappreciated by the market. One such sector is renewable energy, which presents an attractive investment opportunity due to the increasing demand for clean energy and rapidly falling generation costs.

“Europe’s companies are well-positioned and should benefit from increased global momentum on tackling climate change as they are already ahead of the curve on this front. We expect the European green deal to help bolster what is already solid demand for companies that are helping to fight climate change.

“In this regard, Scatec is an example of a company that continues to stand apart from its competitors in the renewable energy sector. This Norwegian renewable energy producer is taking advantage of the rapid development of new markets for renewable energy in countries such as Bangladesh, Vietnam and Indonesia.

“Despite the pandemic, global investment in low-carbon energy transition reached $500bn (£364.94bn) in 2020, a 9 per cent increase on the previous year. As such, in March 2021 Scatec announced a NOK100bn (£8.21bn) investment plan to meet the growing global demand for solar, hydro and wind energy, and storage, to help scale the solutions to global sustainability challenges. Overall, on the basis of the company’s strong growth record and business plans, we believe that Scatec’s long-term growth prospects continue to look attractive.”

Scatec was JPMorgan European Discovery Trust’s 19th-largest holding and accounted for 1.78 per cent of its assets at the end of June.