CIP enters into renewable energy agreement with Vestas
Published by Bella Weetch,
Editorial Assistant
Energy Global,
Copenhagen Infrastructure Partners (CIP), a fund manager within greenfield renewable energy infrastructure investments, has entered into an agreement with Vestas, whereby Vestas will acquire a 25% minority stake in CIP. The transaction proceeds will be committed to re-investments into CIP and new funds over the years to come to accelerate growth and innovation and increase co-investments in the renewable energy sector.
Over the past decade, the renewable energy market has seen tremendous growth driven by major technological advancements reducing the cost of green energy. In the coming decades, growth in renewable power generation will accelerate as major economies put the climate challenge on top of the agenda, with ambitious targets for reduction of carbon emissions.
At the same time, the scope and size of the renewable energy market will increase, driven by the vast opportunities to decarbonise high energy demand sectors currently supplied by fossil fuels. CIP will use part of the transaction proceeds to create and co-invest into a new Energy Transition Fund, which will be launched in 1H2021. The Energy Transition Fund will invest in technologies such as Power-to-X, which will be instrumental for the decarbonisation of large-scale markets in fuel and feedstock.
PensionDanmark is the founding investor in the CIP funds, the sole investors in the first fund in 2012 and one of the largest anchor investor in all funds managed by CIP.
In 2012, CIP established one of the world’s first dedicated funds for utility scale greenfield renewable projects with a commitment of €1 billion in cooperation with PensionDanmark. Eight years later, CIP now manages approximately €14 billion of investor commitments from close to 100 investors comprising pension and insurance companies, and large family offices. CIP has an ambition to continue its growth and increase its renewable investments toward €75 - 100 billion by 2030.
As a minority owner, Vestas will be represented at the CIP Holding board and will, together with the CIP senior partners, focus on the strategic direction of CIP.
The daily management and governance of the CIP-managed funds will continue to be carried out by the CIP Partner Group and investment committee of the individual funds. CIP will not be limited in any way in relation to choosing providers of wind turbines and services and negotiating competitive market terms. The CIP team will continue to be responsible for project origination and investment structuring in order to generate the best possible risk and return profile for the investors in the funds.
Vestas will acquire the 25% minority stake in CIP for a total consideration of €500 million: €180 million as an upfront payment and a €320 million potential earn out.
For more news and technical articles from the global renewable industry read our latest issue of Energy Global magazine.
Energy Global’s Winter 2020 issue
The Winter issue of Energy Global provides a range of technical articles covering technological advancements and future outlooks in the renewables sector, from companies including CorPower Ocean, Rystad Energy, Black & Veatch, Voltalia, FUERGY, and more.
Read the article online at: https://www.energyglobal.com/special-reports/18122020/cip-enters-into-renewable-energy-agreement-with-vestas/
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