* To raise 950 mln euros funding, mainly project financing
* Banks favouring solar funding in Italy
By Stephen Jewkes)
MILAN, July 8 (Reuters) - Italy's Kinexia will raise 950 million euros in funding to 2013 to invest in renewable energy projects as it seeks to leverage Italy's generous renewable incentives schemes, its chief executive said on Wednesday.
"The investments, almost all in project financing, will take our installed capacity to some 450 megawatts in 2013," Kinexia CEO Pietro Colucci told Reuters on the sidelines of a meeting with the financial community.
He said the company has not encountered any problems with the banks on funding renewables. "We have however noticed there is a trend towards bankrolling solar over wind projects because of the clearer incentive framework," Colucci said.
At the meeting, a banker at a top European investment bank said his group had stopped financing wind projects in Italy to shift its attention to photovoltaic projects because of the clearer incentive rules and better returns.
Photovoltaic installations, which turn sunlight into power, mushroomed in Italy to 500 MW at the end of June from about 22 MW in early 2007 after the government launched a new incentive plan, seen by analysts to be among the most generous in Europe. The scheme guarantees operators up to 0.49 euros per kilowatt hour produced for 20 years.
In its updated business plan Kinexia has increased the weight of solar power in its projected power mix to 12 percent from a previous 4 percent and biomass to 13 percent from 5 percent. Wind projects, while still the lion's share, will fall to 73 percent from a previous 90 percent.
PERMITTING PROCESS
Colucci said the company had a project pipeline of around 1,000 MW. "The projects are in different phases of authorisation but we're confident that even though many will fall by the permitting roadside we will achieve our 450 MW target."
In Italy the permitting process for energy projects is notoriously long and complex.
Kinexia will build in-house renewable plants or take equity stakes in projects with other industrial or financial partners. It is planning a capital increase of 100-150 million euros to service acquisition plans which will be carried out by offering its shares.
Colucci said Kinexia hopes to be a significant player in the consolidation of Italy's fragmented renewable energy market. "At the moment we're focused on the Italian market but we could be interested in looking outside Italy in 2011," he said.
Speaking to reporters on the sidelines of the presentation, Colucci said Kinexia intended to sell its cosmetics and nutritional arm to focus on renewables.
A series of possible buyers including Chinese groups are in talks and a deal could be reached by year end, he said.
Kinexia used to be called Schiapparelli 1824 which is famous for its fragrances Arrogance and Pikenz brands.
Colucci, who has a track record in waste and environmental businesses, took over the company in 2008 and changed its name to Kinexia at the end of the year. He controls the company through Allea SpA. (Editing by James Jukwey)