The heavyweights of Wall Street are positioned in the buoyant business of renewables in Spain. The latest movement has been that of Goldman Sachs, which has announced the launch of Verdalia, a company with which it wants to bet on biomethane throughout Europe.
The center of this new strategy will be in Madrid. And it will be endowed with 1,000 million, which Goldman Sachs will contribute from its asset management area, for four years. It will invest both in projects in the early stages of development and in larger operating assets. The company has already signed its first agreement to purchase, subject to regulatory approval, a portfolio of biomethane projects under development in Spain, with a total capacity of 150 GWh/year.
Goldman Sachs is following a well-trodden path, that of betting on the energy sector in Spain. From its infrastructure investment branch, the US bank was already the owner of 50.1% in Redexis between 2010 and 2018. In that year it sold its stake to the two funds with which it shared the shareholding –ATP and USS– and to two Chinese funds, GT Fund and CNIC, which entered into the company’s capital. The transaction valued the gas company at $3 billion, including debt, and valued Goldman Sachs’ stake at $1.5 billion. In fact, the bank has signed up its leadership at Redexis to pilot this new adventure in biomethane.
The era of Goldman Sachs at the helm of Redexis coincides with a time when investment banks decided to position themselves in the gas business. A Morgan Stanley fund owned Madrileña Red de Gas, which sold the company in 2015 to the Chinese fund Gingko Tree Investment, the Dutch pension fund PGGM and the French utility EDF, after probing an IPO. The Chinese have now tried to sell the company back, but without success.
More recent is the bet by JP Morgan, which owns Nortegas through its asset management arm. He joined the company in 2017 together with the Abu Dhabi sovereign wealth fund, the Swiss Life insurance company and the Covalis fund. And last year it took control of the firm after the acquisition of the participation of the Arabs. It has been precisely through Nortegas with which he has tried in recent months to win Madrileña.
JP Morgan, with its powerful investment branch in infrastructures, has been the one that up to now has invested the most in renewables in Spain. Its investment arm in the sector, Sonnedix, is present in ten countries, and has a total capacity of 8GW of renewable energy. In Spain, where it has been present since its inception in 2009, it has reached an operating capacity of more than 770MW, and more than 850MW in projects under construction and different phases of development. Its latest transaction was the purchase from Qualitas Energy of 169 photovoltaic solar plants, with a capacity of 136 MW, with a valuation of about 500 million euros.
other actors
These banks, through their funds, enter to fight on a battlefield already hotly contested by the giants of infrastructure investment. One of the latest relevant operations in this segment is that of the Energy Infrastructure Partners (EIP) fund, which in alliance with Crédit Agricole has bought 25% of Repsol’s renewables subsidiary for 905 million. Just a few months later, it agreed with Iberdrola to purchase 49% of one of its star assets, the Vikinger offshore wind farm, in which it has invested 700 million.
Beyond Wall Street, Canadian investors have been other of the most present in the Spanish market. An example of this is that of Brookfield, one of the most active investors. In 2018 it launched a takeover bid for Saeta Yield and in 2019 it acquired 50% of X-Elio. Now it is considering exercising its first-hand option on the other 50%, which is in the hands of KKR. CDPQ acquired a macro portfolio of Q Energy, which it later combined with 350 MW that it acquired precisely from Brookfield. Aimco was also the owner of Eolia until in 2021 it sold the Spanish platform to an alliance of Engie and Crédit Agricole.
Precisely the companies in the energy sector have been another very active actor in taking on renewable projects. Their goal has been to go to the market to add megawatts to help them take their green turn. Repsol has been especially active. In December it announced an agreement with Asterion to acquire a portfolio of 7,700 MW for up to 580 million, which is in addition to the 2,350 MW it bought from Viesgo in 2018.
Iberdrola, for its part, chooses to give access to partners to develop their own projects. It has done the same this year with its green portfolio in Spain of more than one giga, the so-called Romeo project, in which it sold 49% to Norges Bank.
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