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This week we discuss General Atlantic’s acquisition of Actus to expand into renewable energy, Cubico consolidating its UK renewable holdings, Northvolt securing project financing to expand its battery factory, and Mitsubishi’s investment in European Energy’s renewable assets.
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Allen Hall: I’m Allen Hall, president of Weather Guard Lightning Tech, and I’m here with the founder and CEO of Intelstor, Phil Totaro and the chief commercial officer of Weather Guard, joel Saxum and this is your News Flash. News Flash is brought to you by our friends at Intelstor. If you need actionable information about renewable projects or technologies, check out Intelstor at intelstor.com.
Global growth investor General Atlantic has agreed to acquire sustainable infrastructure firm Actis in a deal that will create a diversified investment platform with 96 billion dollars in combined assets and under management. Actis, which manages about 12. 5 billion in assets, will become the sustainable infrastructure arm within General Atlantic’s global investment platform.
Actis will retain independence over investment decisions and processes under the Actis brand name. So even though they’re acting as two separate companies and going to operate quasi separately, General Atlantic is making a big move here on Actis and trying to expand into the renewable energy market, Phil?
Philip Totaro: Yeah, General Atlantic already has substantial energy holdings, but this gives them a significant amount of exposure. It’s I want to say 6 gigawatts plus of operational and another, I don’t know, almost 20 plus gigawatts of pipeline in wind and solar that Actis has been involved in. This is, absolutely a big deal.
And it comes on the heels of companies like BlackRock acquiring GIP, which we talked about last week. There’s, there’s a trend here and a pattern emerging with these, These deals where infrastructure investors seem to be getting a better sense and a better feel for renewables. They understand that even if the supply chain side of it hasn’t been particularly profitable, if you’re, an OEM, the independent power producers, the project developers, they’re usually pretty financially solvent and healthy.
And our own analysis confirms that. You’re probably going to see a lot more infrastructure, investment vehicles, gobbling up independent power producers.
Joel Saxum: Yeah, you always say follow the big money, right? So banks wouldn’t be investing in Miami waterfront projects if they thought that the sea levels are going to raise 20 meters next year.
So when you see big money making big moves like this, it’s, a trend. Like you watch these, all the pension groups and the teacher’s pensions and the different things around the world. Those long term investments and infrastructure is the way to go, and I think that BlackRock move, and now this General Atlantic and Actis move, this week is, gonna show that, and we’re gonna continue to see some of these deals happen.
Allen Hall: Cubico sustainable investments owned by the Ontario Teachers Pension Plan and PSB Investments has acquired Peel NRE’s 50 percent stake in Peel Cubico Renewables, a UK Renewable Energy Development joint venture. The financial terms were not disclosed in this transaction. The deal includes transfer of Peel NRE’s Renewable Development team to Cubico and the joint venture’s current offshore wind and solar pipeline.
Again, another merger! Trying to make companies bigger and stronger in the renewable business field.
Philip Totaro: it is, although this one’s a bit different because it’s basically just buying a partner out of a, JV. Which is ultimately when a JV is created, that’s the, intent or the end result is either one partner buys out the other or they sell the entire thing to someone else.
So the important part of this is that Cubico’s consolidating what they have while they’re also looking at potential, divestment opportunities and getting a new investment partner involved or, looking at selling off portions of their portfolio in an asset rotation.
This gives them more knobs to turn, basically, being able to, do that. So I think we can only look at this as a, good thing for, them, certainly.
Joel Saxum: Yeah, an interesting play to see stuff starting to happen onshore in the UK, because that’s where the majority of their development portfolio and some of the assets that they have in this joint venture were, is onshore UK, whereas, there may be some government changes there coming shortly. I know general public over there is leaning towards a different party in the next cycle. Some of these moratoriums of onshore wind, may go away. And you might see some more developments in that part of the world. Cubico is getting in front of it, it looks like.
Allen Hall: Up in Sweden, battery maker Northvolt has signed a 5 billion non recourse project financing deal.
The largest green loan in Europe to date, the financing will expand Northvolt’s factory in northern Sweden, including the battery cell manufacturing and its adjacent battery recycling facility. The Northvolt CEO said the deal is a milestone for Europe’s energy transition and shows sustainable business practices are the key to success.
Obviously one of the key to success is getting financing, Phil. Northvolt seems to be able to do it because they have a lot of contracts. They have a lot of connections with the automakers in Europe. And like over 50 billion, I think, in, in at least temporary orders that they could fill. So that’s a huge pipeline that they have to go ahead and get up to speed on the factory side.
So they’re going to need some financing to do that. This is part of that bigger deal, right?
Philip Totaro: Yeah, absolutely. And they’ve got the EV focus has been their predominant area of their business, but they also have done some dabbling in battery energy storage systems. Besides the electric vehicle market, they’ve got a relationship with Vestas as well, on developing some technologies and integrating it with renewables.
This gives them the opportunity to continue scaling what they’re doing again, mostly fulfilling those obligations with the, the EV order book that they’ve got. But who knows how they, they end up expanding their capabilities. There’s definitely a demand for a grid tie batteries out there. And they’re going to be in a pretty good position to be able to fend off the likes of the Chinese and even to a certain extent, the Korean companies that are also making headway in, in the EV and battery storage market.
Joel Saxum: Yeah, the interesting thing here is that we talk about wind energy all the time, but we’re also, we also talk about the renewable energy transition. And that’s what we’re really focused on. But what this shows you is that the EU and the capital that they have within the EU is dedicated to strengthening who the EU is in this energy transition, right?
They’re like you said, Phil, they’re putting up a, a strong arm towards the Chinese side of the EV market. This is on the heels of the last few months of the EU, calling for basically an investigation into some pricing issues and some fair trade issues with the wind turbine technologies, against China.
Saying, hey, we’ve got our own battery manufacturer, we’re gonna invest the money and we’re gonna put this thing up and we’re gonna make, make due with our, basically the green new deal they have going on in the EU right now.
It’s a big move.
Allen Hall: Mitsubishi HC Capital Inc. announced that the company will invest approximately 700 million euros in European Energy AS.
Mitsubishi will acquire about 20 percent of the outstanding shares and we’ll have voting rights in European energy. So is, this is seems to be a more common play between Japanese large industry and Europeans where the Japanese are, taking some significant stakes in European renewable energy projects.
And this is another one.
Philip Totaro: Yeah, you’ll remember we talked about, I don’t know, I want to say six months ago or so where there was a consortium involving some of the banks in Japan were investing about 10 billion pounds in, in the UK. And this kind of follows on that pattern.
Although it’s interesting that specifically it’s Mitsubishi investing in European energy. I think that makes a pretty compelling case. Investors seem to like it. So again, we’re recording this as the news was coming out and we’re able to gauge the reaction. So investors seem to like it.
It’s also helping to facilitate a conversation where European energy may end up IPOing. At some point, probably next year, if not, probably won’t be before next year. But they’re also getting some new partnerships, including again, one announced just today as we record, with Total Energies.
So it’s helping to facilitate stability and growth for European energy, and it’s only going to propel them to continue to their development throughout northern and parts of Eastern Europe.
Joel Saxum: Interesting here with Mitsubishi taking a different, basically angle at the wind market in Europe.
Because if you remember MHI, Vestas, was Mitsubishi Heavy Industries and Vestas teaming together. So they’ve pulled back from that idea of the OEM side to going with an asset owner, IPP. And now, yeah, European Energy, a lot of their portfolio right now is onshore. And they will be with this Total tie up looking at doing some offshore wind in the Baltics, of Sweden and some other areas as well.
There’s a little bit of experience there, some capital, some big things for European energy. We’ll see how they grow.
