Global Infrastructure Partners' $40 billion portfolio includes the Edinburgh Airport, the Port of Melbourne, a leading shipping container terminal operator, and the largest rail company in Australia.
It will soon include one of the largest Asian renewable energy developers, too.
GIP plans to acquire Equis Energy for $5 billion — a record-high acquisition price for the renewables sector. The agreement was announced early Wednesday morning.
The purchase will give GIP a strong presence in the Asian market. The infrastructure investor owns coal, natural gas and oil assets all over the world. It is increasingly pushing into renewables, most recently by acquiring a 50 percent stake in a 330-megawatt offshore wind farm in the North Sea.
According to GTM Research, Equis has nearly 5 gigawatts of wind and hydro assets under operation. It also has a growing queue of solar projects across the Asia-Pacific region.
“The company has focused less on solar PV developments to-date, but has a significant project pipeline, including one of the largest projects in Australia, the 1-gigawatt Wandoan South project. Equis has late-stage solar PV project developments totaling almost 1.5 gigawatts and an additional 4 gigawatts of early-stage potential projects,” said Tom Heggarty, a senior analyst for global solar markets at GTM Research.
That makes Equis Energy the 11th largest global solar developer, said Heggarty.
“Equis Energy is a unique success story in the APAC region, as it has systematically executed its growth strategy since its founding five years ago,” said Adebayo Ogunlesi, chairman of GIP, in a statement.
According to Equis, it has more than 11 gigawatts or project in operation or under development.
The chart below shows where Equis' expanding solar pipeline is located.
The transaction is also notable for its size. At $5 billion, it's the single-biggest renewable energy acquisition in history. Bloomberg New Energy Finance confirmed the record size in its deal tracker.
It's also yet another signal that traditional energy and infrastructure companies are forcefully pursuing renewables. They're not just experimenting anymore.
In September, Shell bought MP2, a Texas-based company with 1.7 gigawatts of solar, wind, landfill gas and natural gas projects. MP2 also has 550 megawatts of demand response assets under management. Shell now invests $200 million per year in renewables, according to Wood Mackenzie, GTM's parent company.
The French oil major Total is also getting deeper into renewable energy and efficiency, by setting up a solar development arm and making strategic equity investments. Last year, it bought battery-maker Saft for $1.1 billion. It also owns a majority stake in SunPower.
Large global utilities, including Enel, Engie, Centrica and EDF, are also investing in distributed energy platforms across the U.S. Most recently, Enel bought the demand response company EnerNOC for $250 million.
Heggarty said that many leading energy companies were eyeing Equis as an acquisition target.
“This is a really significant transaction for the renewable energy industry. Alongside Global Infrastructure Partners, it had been rumored that a number of the world's largest energy companies, including Shell, Engie and Adani, were looking to acquire Equis,” he said. “Equis was also a particularly attractive proposition due to its portfolio of recently commissioned Japanese solar projects with generous 20-year feed-in tariffs.”
Expect more of this kind of activity in the coming months.
“Solar and wind developers with strong project pipelines, particularly in key emerging markets like Australia and Southeast Asia, could be future acquisition targets for some of these players,” said Heggarty.
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