ACCIONA, a global infrastructure, water and renewable energy group, and Kohlberg Kravis Roberts & Co. LP (together with its affiliates, “KKR”), a leading global investment firm, announced a partnership to consolidate and develop one of the largest operating international renewable energy portfolios in the world.
Under the agreement, KKR will invest in ACCIONA Energía International (AEI), the international renewable energy generation business of ACCIONA Energía, the Spanish multinational’s energy division. KKR is making the investment from its global infrastructure fund.
KKR is acquiring a one-third stake in AEI at a price of €417m and will help to fund future growth of the renewables portfolio. ACCIONA Energía will retain the remaining two-thirds of AEI.
AEI will hold ACCIONA Energía’s operating renewable assets outside Spain, comprising 2.3 GW in 14 countries, including US, Mexico, Australia, Italy, Portugal and South Africa, that will generate an estimated cash flow of €120m distributable to the partners. Most of the portfolio is comprised of wind farms, with a small number of solar (photovoltaic and thermal) assets.
The investment gives an implied enterprise value to AEI of €2.6bn, including €1.3bn in equity and €1.3bn in net debt, making this one the world’s largest financial transactions in the renewable energy sector to date.
ACCIONA Energía will operate AEI’s assets for 20 years under a management agreement. ACCIONA Energía will also give AEI a Right of First Offer on future renewable energy projects it develops within AEI’s operational territory. ACCIONA Energía has a strong pipeline that can be accelerated through this partnership.
The agreement is expected to be closed before the end of the year.
The intention of both partners is to promote an international IPO through a YieldCo vehicle that will hold all or part of the assets of AEI. The agreement includes an earn-out consideration of an additional purchase price up to €50m based on the outcome of YieldCo’s public offering.
Henry Kravis, co-Chairman and co-CEO of KKR, said: “This investment adds to our track record of building successful partnerships with corporates and families. 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, said: “We are very pleased to have KKR on board as a long-term investment partner who understands and shares our ambition to grow in the renewable energy sector. Our strategic alliance will broaden our international reach, and it will transform the scale of what we can achieve.”
Jesús Olmos, Head of KKR Infrastructure in Europe and Head of KKR’s operations in Spain, said: “Today’s announcement represents another important step in the growth and diversification of our global infrastructure platform, following earlier investments in onshore wind, solar, water utilities, district heating, locomotive leasing and parking, in Europe and the US.
Rafael Mateo, CEO of ACCIONA Energía, said: “There is a strategic rationale for this partnership because of our complementary roles, where ACCIONA brings 20 years of experience in project development and a strong technological track record.”