The investment fund Global Infrastructure Partners (GIP) agreed to buy Equis Energy, a Singapore-based developer of renewable-power projects, for US$5 billion including debt, a record for the industry.
The deal includes $1.3bn of liabilities and is expected to close in the first quarter, the companies said on Wednesday. Equis Energy’s portfolio of assets includes solar, wind and hydroelectric power operations in Australia, Japan, India, Indonesia, the Philippines and Thailand.
Renewable power is attracting more investor interest as governments throughout Asia seek alternatives to fossil fuels to meet rising energy demand and combat pollution. Equis Energy, which is developing one of the largest solar plants in Australia, has over 180 assets in operation, construction and development with capacity of more than 11 gigawatts, the two companies said.
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The size of the deal “may be a signal that scale is also important in the renewable-energy industry as traditional tariff structures and incentives are dismantled and costs need to be reduced to improve investment returns,” said Tom O’Sullivan, founder of Tokyo-based energy consultant Mathyos.
The acquisition is the biggest ever for the renewables industry, according to the companies and Bloomberg New Energy Finance.
Equis Energy “is a strong fit with GIP’s global renewable-investment strategy,” said Adebayo Ogunlesi, GIP’s chairman and managing partner. Equis Energy is the largest independent renewable-energy power producer in the Asia Pacific, according to the statement.
Credit Suisse and JPMorgan were financial advisers for Equis Energy, with Skadden, Arps, Slate, Meagher & Flom acting as legal adviser. Clifford Chance advised GIP, the companies said.
The Global Infrastructure Partners III fund is buying Equis Energy with investors including Canada’s Public Sector Pension Investment Board and CIC Capital, it said.