Global infrastructure, water and renewable energy group Acciona has partnered with investment firm Kohlberg Kravis Roberts & Co. LP (KKR) to develop one of the largest operating international renewable energy portfolios in the world.
Under the agreement, KKR will invest in Acciona Energia International (AEI), the renewable generation business of Acciona Energia, Acciona’s energy division. KKR will invest from its global infrastructure fund and will acquire one-third stake in AEI at a price of 417 million euros. This will help to fund future growth of Acciona’s renewables portfolio. Acciona Energia will retain the remaining two thirds of AEI.
AEI will hold Acciona Energia’s operating renewable assets outside Spain, consisting of 2.3GW in 14 countries including the US, Mexico, Australia, Italy, Portugal and South Africa. This will generate an estimate cash flow of 120 million euros to the partners. Most of this portfolio consists of wind farms with a small number of solar PV and solar thermal assets.
The investment gives an implied enterprise value to AEI of 2.6 billion euros, including 1.3 billion in equity and 1.3 billion in net debt, making this one the world's largest financial transactions in the renewable energy sector to date. Acciona Energia will operate AEI’s assets for 20 years under a management agreement and will also give AEI a Right of First Offer on future renewable energy projects it develops within AEI’s operational territory. The agreement is expected to be closed before the end of the year.
“This investment adds to our track record of building successful partnerships with corporates and families” said Henry Kravis, co-Chairman and co-CEO of KKR. “I am really optimistic about the opportunity to partner with such a prominent renewable energy company and to help further develop what is already one of the largest operating renewable portfolios in the world.”
José Manuel Entrecanales Domecq, Chairman and CEO of Acciona, added that the alliance will broaden the company’s international reach and will transform the scale of what it can achieve.