ENGIE, Crédit Agricole Assurances and Mirova win bid to acquire 1.7 GW hydroelectric portfolio from EDP in Portugal

December 19 2019

ENGIE, together with its consortium partners Crédit Agricole Assurances and Mirova, an affiliate of Natixis Investment Managers, announces it has 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 GW[1], and is the 2nd largest engineering company in hydro related projects on a global basis[2].

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.

Isabelle Kocher, CEO of ENGIE, said “Our increased focus on providing clients with 100% renewable power tailored to their needs will enable ENGIE to be the leader of the zero carbon transition. This transaction accelerates the implementation of ENGIE’s strategy. Our target to add 9 GW renewables over the period 2019 – 2021 is confirmed and this acquisition comes on top of it.”

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 will ultimately deliver value to our investors.” says Raphael Lance, Head of Energy Transition Funds at Mirova.

[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.

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