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Winds of change

Brewin Dolphin Securities is sponsoring
the Ventus VCT, a specialist venture capital trust that invests in
companies developing, constructing and operating small UK wind energy
projects.

The directors point out that the UK has made a strong commitment to
the development of renewable energy. The main aspect of this is the
Renewables Obligation introduced in 2002 which provides financial
incentives for electricity suppliers to obtain a portion of their
electricity from renewable sources. This will remain in place until
at least 2007 and the directors feel this makes wind generation, as
one of the most cost-effective renewable energy sources, an
attractive investment opportunity.

The focus will be companies involved in community projects, projects
initiated by small-scale developers, small industrial sites and
projects which are too small to be of interest to big development
companiesThe VCT manager is Climate Change Advisory, a subsidiary of
a specialist merchant banking group. It has established a financing
package for small wind projects, enabling the companies to benefit
from long-term power purchase agreements for the sale of electricity
at an agreed price. This solves the potential problem of uncertainty
of the future price of ren-ewable energy and the financing problems
smaller wind projects face.

On the positive side, smaller wind projects are subject to fewer
planning objections than big sites and as they place fewer demands on
the electricity grid, they are connected more easily.

This VCT provides an alternative to the crowd of Aim VCTs available
to investors looking for VCT income tax reliefs. However, it focuses
on one industry and performance may be affected by factors such as
the failure of wind turbines and finding suitable
projects.

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