EFG Hermes’ private equity arm has signed a USD208 million transaction to acquire a 49 per cent equity shareholding and outstanding shareholders loans in EDPR France.
EDPR France has a portfolio of 33 operational wind farms with a combined gross capacity of 334 MW. The company is a subsidiary of EDP Renewables (EDPR), one of the top four global renewable energy companies that develops, constructs and operates renewable energy assets with over 8.6 GW of installed capacity across three continents.
“Our first investment beyond the borders of the Middle East and Africa is a natural outgrowth of our emphasis on infrastructure private equity and, moreover, marks the launch of our direct investment strategy,” says EFG Hermes co-chief executive officer Karim Awad. “Our interest in infrastructure investing generally — and in renewable energy in particular — reflects our aim of being catalysts for sustainable development while simultaneously generating attractive returns for our shareholders and co-investors alike.”
It is the firm’s second investment in the generation of green energy in under 12 months, coming after an earlier commitment via the InfraMed fund to the establishment of the Arab world’s first utility-scale wind farm in Jordan.
Joâo Manso Neto, CEO of EDP Renewables, says: “I am pleased to announce this new partnership and the breakthrough agreement with EFG Hermes, which is part of the asset rotation plan that the company has been implementing in order to deliver its growth strategy.”
Approximately half of the USD 208 million buyout will be funded via an acquisition finance facility secured from leading European banks. EFG Hermes will provide seed capital of approximately USD5 million for the equity component of the transaction, with the remainder raised from the GCC. Completion of the transaction is subject to regulatory approval and other customary closing conditions.
Under the terms of the agreement, EFG Hermes’s private equity arm will manage the investment vehicle, while EDPR France will retain operational control over the acquired assets.
EDPR France has a 15-year feed-in-tariff arrangement with the French government’s majority-owned Électricité Réseau Distribution France, securing the investment’s future cash flows by an A+ rated off-taker.
