While infrastructure companies often have no employees, it is important to evaluate the wider governance framework in the context of the project. Relevant considerations include assessing whether a project is in compliance with relevant laws and regulations and whether best practice policies have been adopted by the project company board. At Foresight we aim to ensure that where project companies have not already implemented established best practice operations policies, these will be adopted on completion of an investment.
- Compliance with the law: Is the project in compliance with relevant local, national and international laws and regulations? Does non-compliance represent a significant risk of prosecution and/or business interruption? Are there any prosecutions pending or threatened?
- Employment and human rights: Does the project comply with relevant employment legislation? Does the project ensure that the human rights of its employees are considered and protected?
- Anti-bribery and corruption: Do the project’s key contracts contain termination rights in respect of breach of the Bribery Act 010, or equivalent? Does the project have an anti-bribery policy?
- Management structure: Are the project’s decision-making processes and legal documents appropriate, robust and supportive of shareholders’ rights? Are there sufficient accountability, favourable indemnities and warranties in project documentation?
- Board: Is the composition of the Board and the quality and experience of its members suitable? Is the Board free from conflicts of interest and does the Board contain independent directors?
As a wind farm, the 15 Turbine 45MW Krakow in Northern Germany, is inherently clean and registers as one of the cleanest energy generation asset classes. The project has very low emissions, effluent and waste footprint and Foresight has ensured there are policies in place for the responsible management of what little waste there is and has analysed the impact of the farm on the local community.
When deciding the governance for Krakow, it was of paramount importance that the asset was free from allegations of bribery or corruption surrounding the authorisation and permitting of the asset. Suitable policies are in place to ensure both the asset and its activities remain free from both corruption and bribery throughout the asset’s life.
In order to govern the asset and make sure the right decisions are made, a board composed of appropriately qualified individuals with a suitable range of industry-relevant experience was appointed. The Board consists of key Foresight investment and asset managers who have deep experience in both onshore wind asset management, and of the German regulatory and energy market, with over 20 years’ experience combined. It also includes a member of wpd Windmanager, a subsidiary of wpd AG, a specialist provider that will perform some ongoing technical management services for the wind farm in the future. The Board ensures a favourable management structure composed of well qualified individuals and ensures these will be compliance at all levels and across all parties involved.