Written by Ben Sharples and Chisaki Watanabe. This article first appeared in Bloomberg Technology.
Investment fund Global Infrastructure Partners agreed to buy Equis Energy, a Singapore-based developer of renewable-power projects, for $5 billion including debt, a record for the industry.
The deal includes $1.3 billion of liabilities and is expected to close in the first quarter, the companies said in a joint statement on Wednesday. Equis Energy’s portfolio of assets includes solar, wind and hydroelectric power operations in Australia, Japan, India, Indonesia, the Philippines and Thailand.
Renewable-power is attracting more investor interest as governments throughout Asia seek alternatives to fossil fuels to meet rising energy demand and combat pollution. Equis Energy, which is developing one of the largest solar plants in Australia, has over 180 assets in operation, construction and development with capacity of more than 11 gigawatts, according to the statement.
The size of the deal “may be a signal that scale is also important in the renewable-energy industry as traditional tariff structures and incentives are dismantled and costs need to be reduced to improve investment returns,” Tom O’Sullivan, founder of Tokyo-based energy consultant Mathyos, said by email.
The acquisition is the biggest ever for the renewables industry, according to the companies and Bloomberg New Energy Finance.
‘Strong Fit’
Equis Energy “is a strong fit with GIP’s global renewable-investment strategy,” Adebayo Ogunlesi, GIP’s chairman and managing partner, said in the statement. Equis Energy is the largest independent renewable-energy power producer in the Asia Pacific, according to the statement.
Credit Suisse Group AG and JPMorgan Chase & Co. were financial advisers for Equis Energy, with Skadden, Arps, Slate, Meagher & Flom LLP acting as legal adviser. Clifford Chance LLP advised GIP, the companies said.
Global Infrastructure Partners III fund is buying Equis Energy with investors including Canada’s Public Sector Pension Investment Board and CIC Capital Corp., it said in a separate statement.
Equis Energy assets include:
- Solar: 2.4 GW of generation capacity; 4.3 GW under development.
- Wind: 2.3 GW of generation capacity; 2 GW under development.
- Hydroelectric: 0.3 GW of generation capacity.