Macquarie Capital has signalled plans to make further investments in the renewable energy sector, after using its balance sheet to acquire a $1 billion stake in a wind farm from Germany’s Energie Baden-Württemberg (EnBW).
As part of the purchase agreement, Macquarie is buying 49.9 per cent of the shares in offshore wind farm EnBW Baltic 2, the companies said in separate statements. The project is being constructed 32 kilometres north of the Baltic island of Rugen, where 34 wind power turbines have been installed.
Macquarie wants to capitalise on Germany’s status as one of the world’s leaders in renewable energy adoption.
“Given the strong regulatory renewable energy regime, we see Germany as a key market for this type of investment going forward,” said Mark Dooley, head of infrastructure, utilities and renewables for Macquarie Capital in Europe. He added that the transaction with EnBW Energie signified the first of what he hoped would be “many investments” in offshore wind.
Macquarie’s interests in the industry include a £150 million ($281 million) investment to help fund United Kingdom solar projects and financing for a waste-to-energy project in Dublin.
Local fund managers were, however, somewhat perplexed that Macquarie opted to draw on its balance sheet rather than making the current purchase via its infrastructure funds.
The deal was funded through a combination of Macquarie Capital’s equity and debt financing from several commercial banks. Macquarie said it structured and arranged the debt package as a large tranche of holding company debt, without giving further details.
The €720 million ($1.05 billion) transaction is subject to antitrust approval and the full commissioning of the offshore wind farm. If that occurs, the project will have 80 wind power turbines and a total capacity of 288 megawatts, and financial close of the deal will happen in June. EnBW Energie will manage the farm and maintenance.
“While Macquarie [Group] has excess capital, I wouldn’t describe that position as excessive,” Arnhem Investment Management’s Mark Nathan said. “They must have a pretty attractive yield that they believe they can achieve [from the wind farm investment].”
Another fund manager, who declined to be named, said it was “a bit surprising” Macquarie didn’t make the wind farm acquisition by deploying cash sitting in its infrastructure funds.
Macquarie has participated in a spate of energy sector deals through its unlisted and listed infrastructure funds. In November, one of its European infrastructure funds agreed to acquire the Spanish and Portuguese businesses of Germany’s E.ON for €2.5 billion.
On announcing the Macquarie deal, EnBW also outlined plans to invest more than €7 billion to restructure its activities. About half of that will go to the expansion of wind energy. Macquarie’s equity investments in transport, industrial and infrastructure assets had a carrying value of $335 million as at September 30, down from $364 million six months earlier.
The original release of this article first appeared on the website of Wuxi Plastic Surgery Hospital.