ENGIE, Crédit Agricole Assurances and Mirova win bid to acquire 1.7 GW hydroelectric portfolio from EDP in Portugal
Mirova, ENGIE et Crédit Agricole Assurances have won a competitive process conducted by EDP for the acquisition of Portugal’s second largest hydroelectric portfolio, for an enterprise value and consideration of EUR 2.2 billion.
The hydroelectric portfolio has a generation capacity of 1.7 GW with a weighted average remaining concession term of 45 years and includes three newly commissioned pump storage units along with three recently repowered run-of-river plants.
ENGIE, as the industrial partner for the consortium, will operate and maintain the hydroelectric portfolio and also provide energy management services. ENGIE has a strong track record of operating hydro generation assets, with a current global hydro capacity of 20 GW1, and is the 2nd largest engineering company in hydro related projects on a global basis2.
The acquisition of the hydroelectric portfolio is instrumental to the deployment of ENGIE’s zero-carbon strategy, bringing flexible renewable capacity which complements ENGIE’s existing Iberian portfolio of onshore wind (1.1 GW) and solar (50 MW) power, most of which is already in partnership with Mirova.
Through this transaction, ENGIE will secure a significant level of dispatchable renewable power generation, notably via the pump storage assets, which allows ENGIE to provide green corporate PPAs on an “as consumed” basis to its clients.
In the medium to long term, and as ENGIE further expands its wind and solar portfolio, the pump storage hydro production will become more valuable given the inherent intermittency of wind and solar assets.
ENGIE owns 40% of the consortium, while Crédit Agricole Assurances and Mirova, through managed funds, own 35% and 25%, respectively. A net debt impact of c. EUR 650 million is anticipated for ENGIE. ENGIE will not consolidate the investment. Closing of the transaction is expected during the second half of 2020.
Through this transaction, Crédit Agricole Assurances, the first insurance company in France, is strengthening its commitment to the energy transition, which is fully integrated into the Crédit Agricole group's climate strategy. "ENGIE and Mirova are partners of choice, with significant experience in hydro projects. Thanks to this new partnership in Portugal, Crédit Agricole Assurances is consolidating its presence in the energy transition in Europe, a sector in which it is the leading investor in France”, said Frédéric Thomas, CEO of Crédit Agricole Assurances.
This transaction continues a long-standing relationship between Mirova and ENGIE, developed over the past years notably by partnering in several projects in wind and solar in Europe. Mirova will invest via its fund Mirova Eurofideme 4, dedicated to the European energy transition and a dedicated co-investment fund created for the purpose of this transaction. “This investment represents a landmark opportunity for Mirova and Crédit Agricole Assurances to acquire a large portfolio of hydro in Portugal in partnership with ENGIE, and leverage on their unique expertise in managing and optimizing such specific assets, which should ultimately deliver value to our investors.” says Raphael Lance, Head of Energy Transition Funds at Mirova.
For further reading:
1 Including pumped storage capacity of 3.4 GW
2 Through Tractebel Engineering a 100% subsidiary of ENGIE. Ranks #2 in 2018 Engineering News Record ranking of the largest construction and engineering firms.
Additional information
Mirova Eurofideme 4 is a Société de Libre Partenariat (French limited partnership), not subject to the approval of the French Market Authority and reserved for eligible investors only, in accordance with the Fund Regulation. Mirova Eurofideme 4 is managed by Mirova and not open to subscription anymore.
About ENGIE
Our group is a global reference in low-carbon energy and services. In response to the urgency of climate change, our ambition is to become the world leader in the zero-carbon transition "as a service" for our customers, in particular global companies and local authorities. We rely on our key activities (renewable energy, gas, services) to offer competitive turnkey solutions. With our 160,000 employees, our customers, partners and stakeholders, we are a community of Imaginative Builders, committed every day to more harmonious progress.
Turnover in 2018: €60.6bn. The Group is listed on the Paris and Brussels stock exchanges (ENGI) and is represented in the main financial indices (CAC 40, DJ Euro Stoxx 50, Euronext 100, FTSE Eurotop 100, MSCI Europe) and non-financial indices (DJSI World, DJSI Europe and Euronext Vigeo Eiris - World 120, Eurozone 120, Europe 120, France 20, CAC 40 Governance).
About Crédit Agricole Assurances
Crédit Agricole Assurances, the leading insurer in France, unites together Crédit Agricole’s insurance subsidiaries. The group offers a range of savings, retirement, health, personal protection and property insurance products and services. They are distributed by Crédit Agricole Group banks in France and in 9 countries worldwide, by wealth management advisors and general agents. The Crédit Agricole Assurances companies serve individuals, professionals, farmers and businesses. Crédit Agricole Assurances has 4,600 employees. It reported 2018 revenues of €33.5 billion (IFRS).
About Mirova
Mirova is Natixis Investment Managers’ affiliate dedicated to sustainable investment. Through a conviction-driven investment approach, Mirova’s goal is to combine value creation over the long term with sustainable development. Mirova’s talents have been pioneers in many areas of sustainable finance. Their ambition is to keep innovating to propose the most impactful solutions to heir clients. Mirova’s teams have been actively investing in renewable energy infrastructure assets for the past 17 years with over 2 GW of installed capacity across more than 180 wind, photovoltaic, hydro and biomass projects in Europe.
Mirova Eurofideme 4 is a Société de Libre Partenariat (French limited partnership), not subject to the approval of the French Market Authority and reserved for eligible investors only, in accordance with the Fund Regulation. Mirova Eurofideme 4 is managed by Mirova and not open to subscription anymore.
About EDP and the portfolio of hydro assets
EDP (listed in Euronext Lisbon) is a global leader in the renewable energy sector with renewables representing approximately 2/3 of our EBITDA. EDP is also present in electricity networks business (c.25% of EBITDA) and in the client solutions and energy management business. EDP aims to lead the Energy Transition to create superior value through focused investments, with highlight to renewables and networks, continuous portfolio optimization, solid balance sheet and low risk profile, efficient and digitally enabled operations and attractive shareholder remuneration.
The portfolio of assets has a 1.7 GW capacity and c. 45 years of weighted average remaining concession life. The facilities are part of the Douro river system (North East of Portugal). They are composed of 6 units that can be divided into 2 categories: 3 cascade Run-of-River plants with pondage, and 3 recent Pumped storage units.
Advisors
J.P. Morgan is serving as financial advisor and Bredin Prat and Cuatrecasas are serving as legal counsel to ENGIE.
BNP Paribas is serving as financial advisor and BDGS as legal advisor to Crédit Agricole Assurances.
Mirova has been advised by CLP-Cliperton as legal counsel.
Mirova
Affiliate of Natixis Investment Managers
French Public Limited liability company with board of Directors.
Share Capital: €8 813 860
Regulated by the Autorité des Marchés Financiers (AMF) under n° GP 02014.
RCS Paris n° 394 648 216
59 avenue Pierre Mendès France
www.mirova.com
Natixis Investment Managers
RCS Paris 453 952 681
Share Capital: €178 251 690
43 avenue Pierre Mendès France
75013 Paris
www.im.natixis.com
This communication is for information only and is intended for investment service providers or other Professional Clients. The analyses and opinions referenced herein represent the subjective views of the author as referenced unless stated otherwise and are subject to change. There can be no assurance that developments will transpire as may be forecasted in this material.
The hydroelectric portfolio has a generation capacity of 1.7 GW with a weighted average remaining concession term of 45 years and includes three newly commissioned pump storage units along with three recently repowered run-of-river plants.
ENGIE, as the industrial partner for the consortium, will operate and maintain the hydroelectric portfolio and also provide energy management services. ENGIE has a strong track record of operating hydro generation assets, with a current global hydro capacity of 20 GW1, and is the 2nd largest engineering company in hydro related projects on a global basis2.
The acquisition of the hydroelectric portfolio is instrumental to the deployment of ENGIE’s zero-carbon strategy, bringing flexible renewable capacity which complements ENGIE’s existing Iberian portfolio of onshore wind (1.1 GW) and solar (50 MW) power, most of which is already in partnership with Mirova.
Through this transaction, ENGIE will secure a significant level of dispatchable renewable power generation, notably via the pump storage assets, which allows ENGIE to provide green corporate PPAs on an “as consumed” basis to its clients.
In the medium to long term, and as ENGIE further expands its wind and solar portfolio, the pump storage hydro production will become more valuable given the inherent intermittency of wind and solar assets.
ENGIE owns 40% of the consortium, while Crédit Agricole Assurances and Mirova, through managed funds, own 35% and 25%, respectively. A net debt impact of c. EUR 650 million is anticipated for ENGIE. ENGIE will not consolidate the investment. Closing of the transaction is expected during the second half of 2020.
Through this transaction, Crédit Agricole Assurances, the first insurance company in France, is strengthening its commitment to the energy transition, which is fully integrated into the Crédit Agricole group's climate strategy. "ENGIE and Mirova are partners of choice, with significant experience in hydro projects. Thanks to this new partnership in Portugal, Crédit Agricole Assurances is consolidating its presence in the energy transition in Europe, a sector in which it is the leading investor in France”, said Frédéric Thomas, CEO of Crédit Agricole Assurances.
This transaction continues a long-standing relationship between Mirova and ENGIE, developed over the past years notably by partnering in several projects in wind and solar in Europe. Mirova will invest via its fund Mirova Eurofideme 4, dedicated to the European energy transition and a dedicated co-investment fund created for the purpose of this transaction. “This investment represents a landmark opportunity for Mirova and Crédit Agricole Assurances to acquire a large portfolio of hydro in Portugal in partnership with ENGIE, and leverage on their unique expertise in managing and optimizing such specific assets, which should ultimately deliver value to our investors.” says Raphael Lance, Head of Energy Transition Funds at Mirova.
For further reading:
- Mirova Joins Akuo to Finance 132 MW of Wind Power in Poland
- Final close at €857m for Mirova-Eurofideme 4
- Mirova Eurofideme 4 hits first close at 250M€ to support the energy transition in Europe
- Mirova’s Goya project wins ‘europe wind deal of the year’ award at 2018 PFI awards
- Energy Transition: Clean investments for yield-hungry investors
- Mirova acquires 25 MW solar photovoltaic project in Portugal
- The Renewable Energy Market in Europe
- Mirova wins 3rd award in a row at SIATI 2017 with Mirova-Eurofideme 3
- Mirova recognised as “Energy Investor of the Year, Europe” for 2016 at the Infrastructure Investor Awards
- Mirova finalises the closing of its third renewable energy fund, with 350M€ commitment
- Mirova and Valeco team up to support green power
2 Through Tractebel Engineering a 100% subsidiary of ENGIE. Ranks #2 in 2018 Engineering News Record ranking of the largest construction and engineering firms.
Additional information
Mirova Eurofideme 4 is a Société de Libre Partenariat (French limited partnership), not subject to the approval of the French Market Authority and reserved for eligible investors only, in accordance with the Fund Regulation. Mirova Eurofideme 4 is managed by Mirova and not open to subscription anymore.
About ENGIE
Our group is a global reference in low-carbon energy and services. In response to the urgency of climate change, our ambition is to become the world leader in the zero-carbon transition "as a service" for our customers, in particular global companies and local authorities. We rely on our key activities (renewable energy, gas, services) to offer competitive turnkey solutions. With our 160,000 employees, our customers, partners and stakeholders, we are a community of Imaginative Builders, committed every day to more harmonious progress.
Turnover in 2018: €60.6bn. The Group is listed on the Paris and Brussels stock exchanges (ENGI) and is represented in the main financial indices (CAC 40, DJ Euro Stoxx 50, Euronext 100, FTSE Eurotop 100, MSCI Europe) and non-financial indices (DJSI World, DJSI Europe and Euronext Vigeo Eiris - World 120, Eurozone 120, Europe 120, France 20, CAC 40 Governance).
About Crédit Agricole Assurances
Crédit Agricole Assurances, the leading insurer in France, unites together Crédit Agricole’s insurance subsidiaries. The group offers a range of savings, retirement, health, personal protection and property insurance products and services. They are distributed by Crédit Agricole Group banks in France and in 9 countries worldwide, by wealth management advisors and general agents. The Crédit Agricole Assurances companies serve individuals, professionals, farmers and businesses. Crédit Agricole Assurances has 4,600 employees. It reported 2018 revenues of €33.5 billion (IFRS).
About Mirova
Mirova is Natixis Investment Managers’ affiliate dedicated to sustainable investment. Through a conviction-driven investment approach, Mirova’s goal is to combine value creation over the long term with sustainable development. Mirova’s talents have been pioneers in many areas of sustainable finance. Their ambition is to keep innovating to propose the most impactful solutions to heir clients. Mirova’s teams have been actively investing in renewable energy infrastructure assets for the past 17 years with over 2 GW of installed capacity across more than 180 wind, photovoltaic, hydro and biomass projects in Europe.
Mirova Eurofideme 4 is a Société de Libre Partenariat (French limited partnership), not subject to the approval of the French Market Authority and reserved for eligible investors only, in accordance with the Fund Regulation. Mirova Eurofideme 4 is managed by Mirova and not open to subscription anymore.
About EDP and the portfolio of hydro assets
EDP (listed in Euronext Lisbon) is a global leader in the renewable energy sector with renewables representing approximately 2/3 of our EBITDA. EDP is also present in electricity networks business (c.25% of EBITDA) and in the client solutions and energy management business. EDP aims to lead the Energy Transition to create superior value through focused investments, with highlight to renewables and networks, continuous portfolio optimization, solid balance sheet and low risk profile, efficient and digitally enabled operations and attractive shareholder remuneration.
The portfolio of assets has a 1.7 GW capacity and c. 45 years of weighted average remaining concession life. The facilities are part of the Douro river system (North East of Portugal). They are composed of 6 units that can be divided into 2 categories: 3 cascade Run-of-River plants with pondage, and 3 recent Pumped storage units.
Advisors
J.P. Morgan is serving as financial advisor and Bredin Prat and Cuatrecasas are serving as legal counsel to ENGIE.
BNP Paribas is serving as financial advisor and BDGS as legal advisor to Crédit Agricole Assurances.
Mirova has been advised by CLP-Cliperton as legal counsel.
Mirova
Affiliate of Natixis Investment Managers
French Public Limited liability company with board of Directors.
Share Capital: €8 813 860
Regulated by the Autorité des Marchés Financiers (AMF) under n° GP 02014.
RCS Paris n° 394 648 216
59 avenue Pierre Mendès France
www.mirova.com
Natixis Investment Managers
RCS Paris 453 952 681
Share Capital: €178 251 690
43 avenue Pierre Mendès France
75013 Paris
www.im.natixis.com
This communication is for information only and is intended for investment service providers or other Professional Clients. The analyses and opinions referenced herein represent the subjective views of the author as referenced unless stated otherwise and are subject to change. There can be no assurance that developments will transpire as may be forecasted in this material.