Aquila Capital has completed a first close for its third European renewables fund, with backing from a large institutional investor.

The Renewables Fund III, Aquila said, received a “high double-digit million” amount of capital, which has been allocated to a diversified portfolio of photovoltaic and wind power plants in Europe.

Aquila said it has invested €175m in assets so far for the fund, which aims to return 6-7%. A second closing is expected in September.

Roman Rosslenbroich, chief executive of Aquila Capital, said investors looking to build a portfolio in renewable infrastructure need to diversify “across asset classes, electricity markets and regulatory frameworks”. 

The alternative investment manager said APG was not behind the commitment, despite having previously backed Aquila Capital.

Aquila Capital last month launched a fund to co-invest alongside APG in European hydropower infrastructure. APG only takes minority stakes in assets being acquired by Aquila, requiring the investment manager to find other co-investors for each deal.

The firm said it was targeting European institutional investors for the 20-year fund, offering access to an investment programme launched last year for the Dutch pension fund group.

Earlier this year, Aquila invested in 33 hydropower assets in Norway as a seed portfolio for the fund.