Actis to acquire controlling stake in UAE's renewable energy developer Yellow Door Energy

The transaction will be funded through the British private equity firm's $6bn Energy 5 fund

Yellow Door Energy's solar power project in Jordan. Photo: Yellow Door Energy

British private equity firm Actis will acquire a controlling stake in Dubai-based renewable energy developer Yellow Door Energy, as demand for renewable energy resources rises worldwide.

Actis has signed definitive transaction documents for the deal, which is subject to regulatory approvals, the company said in a statement on Thursday.

The transaction will be funded through Actis’s Energy 5 Fund, its latest energy fund with $6 billion of investable capital.

“This [acquisition] presents an exciting opportunity to scale the business, and where we see a clear opportunity and large addressable market”, Lucy Heintz, partner and head of energy infrastructure at Actis, said.

“Our strategy is to build the business into the region’s distributed solar sustainability leader.”

Actis will apply its buy-and-build power strategy to scale the business and accelerate growth, it said. The company has invested in more than 70 renewable energy projects to date, generating approximately 11 gigawatts of renewable energy globally.

Yellow Door Energy, which is backed by multilateral lenders including the International Finance Corporation, Mitsui, Norway's Equinor Energy Ventures and Dammam-based Arab Petroleum Investments Corporation (Apicorp), has about 200 megawatts of secured production capacity.

More than 90 per cent of energy supply in the Middle East is dependent on fossil fuels, Actis said, adding that renewable technology deployment is a key enabler for businesses to achieve low-carbon transition strategies.

Yellow Door Energy has one of the few operating commercial and industrial portfolios of scale in the region with 106MW in operation and 104MW awarded and under construction, the statement said.

The UAE company has the capability to offer customers a power supply that is more economical and sustainable than the grid with 10 per cent to 50 per cent power cost savings for customers.

“I look forward to continuing our mission to provide clean, affordable and reliable energy to businesses in the MEA [Middle East and Africa] region”, said Jeremy Crane, founder and chief executive of Yellow Door Energy.

This [the acquisition] presents an exciting opportunity to scale the business, and where we see a clear opportunity and large addressable market

Lucy Heintz,
partner and head of energy infrastructure at Actis

In the region, the company has key existing relationships, with a large customer base of more than 50 organisations, including sought after blue-chip businesses such as Nestle, Majid Al Futtaim, DHL, Mondelez and Unilever.

Yellow Door Energy, which was spun off from Middle East-focused solar energy investor Adenium Energy Capital in 2015, operates solar photovoltaic projects in the UAE, Saudi Arabia, Bahrain, Egypt, Jordan and Pakistan.

“We believe having a reputable partner such as Actis will propel the company to the next stage of its growth”, said Khalid Al Ruwaigh, chief executive of Apicorp.

“We look forward to supporting their further growth as a leader in bringing clean energy technology to their customers throughout the region”, said Lance Crist, IFC’s global head of infrastructure equity.

Actis recently successfully realised three major energy investments in Latin America — comprising the largest independent renewable energy platform in Brazil, the largest renewable energy independent power provider (IPP) in Chile and a leading IPP in Mexico.

In April, Actis signed an agreement to sell Sprng Energy, one of India’s largest renewable energy companies.