Photographer: Alessia Pierdomenico/Bloomberg

Photographer: Alessia Pierdomenico/Bloomberg

A handful of private equity firms are buying up troubled clean-energy assets, restructuring debts and whole projects in an effort to gain rich rewards from some of the industry’s riskier investments.

The efforts -- by funds including Cerberus Capital Management LP in New York, Oaktree Capital Management LP in Los Angeles and Zouk Capital LLP in London -- run against the trend in the private equity industry, which has scaled back work with renewables in the last year. While much of private equity has been crowded out of clean energy by more mainstream investors, those funds are quietly scavenging attractive returns.

The three are feasting on the industry’s misfortune after Spain, Croatia, Greece, Romania and Bulgaria scaled back support for renewables. Seeking to contain ballooning subsidy bills, another 12 countries have capped programs for clean energy, including the U.K., Portugal, Italy and Austria.

“These projects can be made economically viable with different tools,” said Erich Becker, head of the infrastructure team at London-based Zouk Capital, which is actively seeking distressed assets in western Europe. “Private equity funds have a big advantage in the renewables space, we can be much more creative with structuring and de-risking.”

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