GIP targets Asia-Pacific with blockbuster $5bn Equis deal

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Richard Heap
October 27, 2017
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GIP targets Asia-Pacific with blockbuster $5bn Equis deal

Never get emotionally attached. This is a mantra I stick to rigidly in my personal life – read into that whatever psychological flaws you like! – and it works professionally too. I write about a lot of businesses and it is dangerous to start liking any in particular.

Still, I must admit a sneaking respect for Global Infrastructure Partners. This investor is headquartered in New York and has $40bn of assets under management. It tends to keep a pretty low profile – and then concludes another blockbuster deal. Stylish.

In August, GIP bought a 50% stake in Dong Energy’s 450MW Borkum Riffgrund 2 for €1.2bn. This followed a €780m deal for a 50% stake in Gode Wind 1 back in 2015.

And, this week, GIP went even bigger than those two by buying the Singapore-based developer Equis Energy for $5bn, including $1.3bn of assumed liabilities. It is buying Equis for its GIP III fund, in conjunction with Canadian pensions giant Public Sector Pension Investment Board (PSP Investments), the Chinese state-backed CIC Capital Corporation, and some other unnamed partners.

This is set to be the largest corporation acquisition ever in renewable energy when it completes, which is due in the first quarter of 2018 if it wins regulatory approval.

But, even though the transaction has been on our radar since the summer, GIP’s win has still taken us by surprise. It was not one of the big names reported to be in the mix.

The size of the deal is even more unexpected given that Equis Energy does not have a global reputation. But it should. Equis is the largest independent power producer in the renewable energy market in the Asia-Pacific region, with a portfolio of more than 180 assets totalling over 11GW in the wind, hydro and solar sectors. This includes completed projects and those in development.

Its low profile is partly due to its age. Equis Energy was set up in 2012 by private equity group Equis, which was itself founded in 2010 by former executives from Macquarie, and has attracted a none-too-shabby $2.7bn in its lifetime. It is active in Australia and Japan, as well as India, Indonesia, the Philippines and Thailand. This means it should be a good platform for GIP to expand in renewables in the region.

GIP chairman and managing partner Adebayo Ogunlesi has said Equis was a “unique success story” in “one of the [world’s] most promising renewable energy markets”.

And, in our view, one of the key strengths of Equis is its diversity in terms of technology – wind, hydro and solar – and geography. This means that it is not over-exposed to one market in case of unwanted political or economic shifts.

This is just as well given what is happening in key markets in the Asia-Pacific region. In Australia, the government this month rejected plans for a clean energy target in favour of a ‘national energy guarantee’ that favours sources the government sees as more reliable. In other words, it is a bung for the coal industry, which politicians including ex-prime minister Tony Abbott regard as more reliable than wind. It has also emboldened Abbott and his coal cronies to seek more cuts to renewables subsidies.

Meanwhile, Japan has given uneven support for renewables, in spite of the Tohoku earthquake and Fukushima nuclear disaster in 2011 that pushed clean energy higher up its agenda. Since then, solar has enjoyed strong support and installed solar capacity grew from 3.6GW at the end of 2011 to 42.8GW at the end of 2016. Wind hasn’t, growing from 2.5GW to 3.2GW in the same period.

And low prices in competitive tenders in India have destabilised renewables there too, with states refusing to sign power purchase deals agreed at far higher prices.

This shows there are promising pockets of activity for investors in the Asia-Pacific region, but also that a canny investor would be wise to go in with a diversified platform that isn’t solely reliant on support for wind. That is what GIP and its partners are getting in this Equis deal – and both getting a higher profile in wind to boot.

If that means fewer 'surprise' deals, so be it.

Never get emotionally attached. This is a mantra I stick to rigidly in my personal life – read into that whatever psychological flaws you like! – and it works professionally too. I write about a lot of businesses and it is dangerous to start liking any in particular.

Still, I must admit a sneaking respect for Global Infrastructure Partners. This investor is headquartered in New York and has $40bn of assets under management. It tends to keep a pretty low profile – and then concludes another blockbuster deal. Stylish.

In August, GIP bought a 50% stake in Dong Energy’s 450MW Borkum Riffgrund 2 for €1.2bn. This followed a €780m deal for a 50% stake in Gode Wind 1 back in 2015.

And, this week, GIP went even bigger than those two by buying the Singapore-based developer Equis Energy for $5bn, including $1.3bn of assumed liabilities. It is buying Equis for its GIP III fund, in conjunction with Canadian pensions giant Public Sector Pension Investment Board (PSP Investments), the Chinese state-backed CIC Capital Corporation, and some other unnamed partners.

This is set to be the largest corporation acquisition ever in renewable energy when it completes, which is due in the first quarter of 2018 if it wins regulatory approval.

But, even though the transaction has been on our radar since the summer, GIP’s win has still taken us by surprise. It was not one of the big names reported to be in the mix.

The size of the deal is even more unexpected given that Equis Energy does not have a global reputation. But it should. Equis is the largest independent power producer in the renewable energy market in the Asia-Pacific region, with a portfolio of more than 180 assets totalling over 11GW in the wind, hydro and solar sectors. This includes completed projects and those in development.

Its low profile is partly due to its age. Equis Energy was set up in 2012 by private equity group Equis, which was itself founded in 2010 by former executives from Macquarie, and has attracted a none-too-shabby $2.7bn in its lifetime. It is active in Australia and Japan, as well as India, Indonesia, the Philippines and Thailand. This means it should be a good platform for GIP to expand in renewables in the region.

GIP chairman and managing partner Adebayo Ogunlesi has said Equis was a “unique success story” in “one of the [world’s] most promising renewable energy markets”.

And, in our view, one of the key strengths of Equis is its diversity in terms of technology – wind, hydro and solar – and geography. This means that it is not over-exposed to one market in case of unwanted political or economic shifts.

This is just as well given what is happening in key markets in the Asia-Pacific region. In Australia, the government this month rejected plans for a clean energy target in favour of a ‘national energy guarantee’ that favours sources the government sees as more reliable. In other words, it is a bung for the coal industry, which politicians including ex-prime minister Tony Abbott regard as more reliable than wind. It has also emboldened Abbott and his coal cronies to seek more cuts to renewables subsidies.

Meanwhile, Japan has given uneven support for renewables, in spite of the Tohoku earthquake and Fukushima nuclear disaster in 2011 that pushed clean energy higher up its agenda. Since then, solar has enjoyed strong support and installed solar capacity grew from 3.6GW at the end of 2011 to 42.8GW at the end of 2016. Wind hasn’t, growing from 2.5GW to 3.2GW in the same period.

And low prices in competitive tenders in India have destabilised renewables there too, with states refusing to sign power purchase deals agreed at far higher prices.

This shows there are promising pockets of activity for investors in the Asia-Pacific region, but also that a canny investor would be wise to go in with a diversified platform that isn’t solely reliant on support for wind. That is what GIP and its partners are getting in this Equis deal – and both getting a higher profile in wind to boot.

If that means fewer 'surprise' deals, so be it.

Never get emotionally attached. This is a mantra I stick to rigidly in my personal life – read into that whatever psychological flaws you like! – and it works professionally too. I write about a lot of businesses and it is dangerous to start liking any in particular.

Still, I must admit a sneaking respect for Global Infrastructure Partners. This investor is headquartered in New York and has $40bn of assets under management. It tends to keep a pretty low profile – and then concludes another blockbuster deal. Stylish.

In August, GIP bought a 50% stake in Dong Energy’s 450MW Borkum Riffgrund 2 for €1.2bn. This followed a €780m deal for a 50% stake in Gode Wind 1 back in 2015.

And, this week, GIP went even bigger than those two by buying the Singapore-based developer Equis Energy for $5bn, including $1.3bn of assumed liabilities. It is buying Equis for its GIP III fund, in conjunction with Canadian pensions giant Public Sector Pension Investment Board (PSP Investments), the Chinese state-backed CIC Capital Corporation, and some other unnamed partners.

This is set to be the largest corporation acquisition ever in renewable energy when it completes, which is due in the first quarter of 2018 if it wins regulatory approval.

But, even though the transaction has been on our radar since the summer, GIP’s win has still taken us by surprise. It was not one of the big names reported to be in the mix.

The size of the deal is even more unexpected given that Equis Energy does not have a global reputation. But it should. Equis is the largest independent power producer in the renewable energy market in the Asia-Pacific region, with a portfolio of more than 180 assets totalling over 11GW in the wind, hydro and solar sectors. This includes completed projects and those in development.

Its low profile is partly due to its age. Equis Energy was set up in 2012 by private equity group Equis, which was itself founded in 2010 by former executives from Macquarie, and has attracted a none-too-shabby $2.7bn in its lifetime. It is active in Australia and Japan, as well as India, Indonesia, the Philippines and Thailand. This means it should be a good platform for GIP to expand in renewables in the region.

GIP chairman and managing partner Adebayo Ogunlesi has said Equis was a “unique success story” in “one of the [world’s] most promising renewable energy markets”.

And, in our view, one of the key strengths of Equis is its diversity in terms of technology – wind, hydro and solar – and geography. This means that it is not over-exposed to one market in case of unwanted political or economic shifts.

This is just as well given what is happening in key markets in the Asia-Pacific region. In Australia, the government this month rejected plans for a clean energy target in favour of a ‘national energy guarantee’ that favours sources the government sees as more reliable. In other words, it is a bung for the coal industry, which politicians including ex-prime minister Tony Abbott regard as more reliable than wind. It has also emboldened Abbott and his coal cronies to seek more cuts to renewables subsidies.

Meanwhile, Japan has given uneven support for renewables, in spite of the Tohoku earthquake and Fukushima nuclear disaster in 2011 that pushed clean energy higher up its agenda. Since then, solar has enjoyed strong support and installed solar capacity grew from 3.6GW at the end of 2011 to 42.8GW at the end of 2016. Wind hasn’t, growing from 2.5GW to 3.2GW in the same period.

And low prices in competitive tenders in India have destabilised renewables there too, with states refusing to sign power purchase deals agreed at far higher prices.

This shows there are promising pockets of activity for investors in the Asia-Pacific region, but also that a canny investor would be wise to go in with a diversified platform that isn’t solely reliant on support for wind. That is what GIP and its partners are getting in this Equis deal – and both getting a higher profile in wind to boot.

If that means fewer 'surprise' deals, so be it.

Never get emotionally attached. This is a mantra I stick to rigidly in my personal life – read into that whatever psychological flaws you like! – and it works professionally too. I write about a lot of businesses and it is dangerous to start liking any in particular.

Still, I must admit a sneaking respect for Global Infrastructure Partners. This investor is headquartered in New York and has $40bn of assets under management. It tends to keep a pretty low profile – and then concludes another blockbuster deal. Stylish.

In August, GIP bought a 50% stake in Dong Energy’s 450MW Borkum Riffgrund 2 for €1.2bn. This followed a €780m deal for a 50% stake in Gode Wind 1 back in 2015.

And, this week, GIP went even bigger than those two by buying the Singapore-based developer Equis Energy for $5bn, including $1.3bn of assumed liabilities. It is buying Equis for its GIP III fund, in conjunction with Canadian pensions giant Public Sector Pension Investment Board (PSP Investments), the Chinese state-backed CIC Capital Corporation, and some other unnamed partners.

This is set to be the largest corporation acquisition ever in renewable energy when it completes, which is due in the first quarter of 2018 if it wins regulatory approval.

But, even though the transaction has been on our radar since the summer, GIP’s win has still taken us by surprise. It was not one of the big names reported to be in the mix.

The size of the deal is even more unexpected given that Equis Energy does not have a global reputation. But it should. Equis is the largest independent power producer in the renewable energy market in the Asia-Pacific region, with a portfolio of more than 180 assets totalling over 11GW in the wind, hydro and solar sectors. This includes completed projects and those in development.

Its low profile is partly due to its age. Equis Energy was set up in 2012 by private equity group Equis, which was itself founded in 2010 by former executives from Macquarie, and has attracted a none-too-shabby $2.7bn in its lifetime. It is active in Australia and Japan, as well as India, Indonesia, the Philippines and Thailand. This means it should be a good platform for GIP to expand in renewables in the region.

GIP chairman and managing partner Adebayo Ogunlesi has said Equis was a “unique success story” in “one of the [world’s] most promising renewable energy markets”.

And, in our view, one of the key strengths of Equis is its diversity in terms of technology – wind, hydro and solar – and geography. This means that it is not over-exposed to one market in case of unwanted political or economic shifts.

This is just as well given what is happening in key markets in the Asia-Pacific region. In Australia, the government this month rejected plans for a clean energy target in favour of a ‘national energy guarantee’ that favours sources the government sees as more reliable. In other words, it is a bung for the coal industry, which politicians including ex-prime minister Tony Abbott regard as more reliable than wind. It has also emboldened Abbott and his coal cronies to seek more cuts to renewables subsidies.

Meanwhile, Japan has given uneven support for renewables, in spite of the Tohoku earthquake and Fukushima nuclear disaster in 2011 that pushed clean energy higher up its agenda. Since then, solar has enjoyed strong support and installed solar capacity grew from 3.6GW at the end of 2011 to 42.8GW at the end of 2016. Wind hasn’t, growing from 2.5GW to 3.2GW in the same period.

And low prices in competitive tenders in India have destabilised renewables there too, with states refusing to sign power purchase deals agreed at far higher prices.

This shows there are promising pockets of activity for investors in the Asia-Pacific region, but also that a canny investor would be wise to go in with a diversified platform that isn’t solely reliant on support for wind. That is what GIP and its partners are getting in this Equis deal – and both getting a higher profile in wind to boot.

If that means fewer 'surprise' deals, so be it.

Never get emotionally attached. This is a mantra I stick to rigidly in my personal life – read into that whatever psychological flaws you like! – and it works professionally too. I write about a lot of businesses and it is dangerous to start liking any in particular.

Still, I must admit a sneaking respect for Global Infrastructure Partners. This investor is headquartered in New York and has $40bn of assets under management. It tends to keep a pretty low profile – and then concludes another blockbuster deal. Stylish.

In August, GIP bought a 50% stake in Dong Energy’s 450MW Borkum Riffgrund 2 for €1.2bn. This followed a €780m deal for a 50% stake in Gode Wind 1 back in 2015.

And, this week, GIP went even bigger than those two by buying the Singapore-based developer Equis Energy for $5bn, including $1.3bn of assumed liabilities. It is buying Equis for its GIP III fund, in conjunction with Canadian pensions giant Public Sector Pension Investment Board (PSP Investments), the Chinese state-backed CIC Capital Corporation, and some other unnamed partners.

This is set to be the largest corporation acquisition ever in renewable energy when it completes, which is due in the first quarter of 2018 if it wins regulatory approval.

But, even though the transaction has been on our radar since the summer, GIP’s win has still taken us by surprise. It was not one of the big names reported to be in the mix.

The size of the deal is even more unexpected given that Equis Energy does not have a global reputation. But it should. Equis is the largest independent power producer in the renewable energy market in the Asia-Pacific region, with a portfolio of more than 180 assets totalling over 11GW in the wind, hydro and solar sectors. This includes completed projects and those in development.

Its low profile is partly due to its age. Equis Energy was set up in 2012 by private equity group Equis, which was itself founded in 2010 by former executives from Macquarie, and has attracted a none-too-shabby $2.7bn in its lifetime. It is active in Australia and Japan, as well as India, Indonesia, the Philippines and Thailand. This means it should be a good platform for GIP to expand in renewables in the region.

GIP chairman and managing partner Adebayo Ogunlesi has said Equis was a “unique success story” in “one of the [world’s] most promising renewable energy markets”.

And, in our view, one of the key strengths of Equis is its diversity in terms of technology – wind, hydro and solar – and geography. This means that it is not over-exposed to one market in case of unwanted political or economic shifts.

This is just as well given what is happening in key markets in the Asia-Pacific region. In Australia, the government this month rejected plans for a clean energy target in favour of a ‘national energy guarantee’ that favours sources the government sees as more reliable. In other words, it is a bung for the coal industry, which politicians including ex-prime minister Tony Abbott regard as more reliable than wind. It has also emboldened Abbott and his coal cronies to seek more cuts to renewables subsidies.

Meanwhile, Japan has given uneven support for renewables, in spite of the Tohoku earthquake and Fukushima nuclear disaster in 2011 that pushed clean energy higher up its agenda. Since then, solar has enjoyed strong support and installed solar capacity grew from 3.6GW at the end of 2011 to 42.8GW at the end of 2016. Wind hasn’t, growing from 2.5GW to 3.2GW in the same period.

And low prices in competitive tenders in India have destabilised renewables there too, with states refusing to sign power purchase deals agreed at far higher prices.

This shows there are promising pockets of activity for investors in the Asia-Pacific region, but also that a canny investor would be wise to go in with a diversified platform that isn’t solely reliant on support for wind. That is what GIP and its partners are getting in this Equis deal – and both getting a higher profile in wind to boot.

If that means fewer 'surprise' deals, so be it.

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Not a member yet?

Become a member of the 6,500-strong A Word About Wind community today, and gain access to our premium content, exclusive lead generation and investment opportunities.