Investment funds and large Spanish fortunes are taking advantage of the boom in renewables and reaping millionaire capital gains by taking advantage of the enormous appetite for these assets, with returns well above other sectors.
The wave has been going on for years and the list of operations is growing. The last, those carried out in recent days by the Sonnedix fund, a long-term manager controlled by institutional investors advised by JP Morgan. This firm has become the Spanish photovoltaic leader with a cascade of purchases that have benefited various funds and large fortunes. The most recent, the acquisition of a portfolio of 100 megawatts (MW) already in operation to the construction company ACS. And the most significant, the purchase in 2017, for 600 million, of Vela Energy from Centerbridge.
This US fund is among the venture capital firms that, after the PP government cuts to the sector, were able to use "their vast economic resources" to "take advantage of a climate of certain regulatory instability to make investments at competitive prices," as they explained in a Article published in October 2017 in Cuadernos de Energía Carmen Becerril, former general director of Energy Policy and Mines, president of Omel and former director of Acciona, and the current president of the Aelec employer, Marina Serrano.
Several transactions have been in progress for months. Between them, the sale of the CSP plants of the Canadian fund Brookfield, acquired in February 2018 through a public acquisition offer (takeover) on Saeta Yield, ACS's former renewables business, and valued at around 400 million, plus another 1,400 million in debt. Or the 2 billion waiting to enter the French funds Eurazeo and Infravia for the sale of Reden Solar, with about 650 megawatts (MW) photovoltaic.
In 2019, these two funds closed the acquisition of 21 photovoltaic plants for 400 million, with strong capital gains for large assets managed by the Andorran bank Andbank through the manager Everwood Capital. This firm has been one of the most active in recent years, with operations such as the purchase for 750 million, at the end of 2020, from a portfolio of some 1,100 MW of photovoltaic power to the Prodiel group, controlled by Ángel Haro, president of Betis, and the Godia family, one of the great Catalan fortunes. In 2021, Everwood, Prodiel and the Godias created DVP Solar, with more than 5 gigawatts photovoltaic under development in Europe and Latin America, according to their website.
Also last year, in March, Cubico, an investment vehicle in renewables of the Canadian funds PSP Investment and Ontario Teachers Pension Fund, closed the purchase of T-Solar for 1,500 million. The figure, which included a debt of 900 million, multiplied by 12.5 times the 120 million that the seller, I-Squared, disbursed at the end of 2016 for the renewable assets of the bankrupt construction company Isolux. In that process, I-Squared beat firms like KKR and Cerberus, a vehicle owned by magnate George Soros or Cubico itself.
One of the most recent transactions has been the takeover of the Swedish fund EQT, controlled by the Wallenberg family (one of the richest in Sweden) and owner of the idealista real estate portal, on the Basque Solarpack. The takeover, valued at 881 million, has meant excluding Solarpack from the stock market and has provided strong capital gains to its founders, the Galíndez family, who kept 51%, although they will keep a small stake after the sale. The offer also allowed the exit of another Biscayan saga of ancestry, the Ybarra Careaga, which entered Solarpack after its IPO in December 2018 and still had 5%. The Ybarras have recently bet on another group in the sector, the Galician Ecoener (they have 6.14%), which went public in May, with a until now discreet trajectory on the stock market.
Days after the Solarpack takeover was liquidated, Ence announced a new divestment in renewables: the sale of five photovoltaic installations to Naturgy with about 373 megawatts (MW) for 62 million that it plans to reinvest focusing on biomass, photovoltaics and energy storage. Ence's main shareholder (about 30%) is the billionaire Juan Luis Arregui (founder of Gamesa), along with great fortunes such as José Ignacio Comenge (shareholder of Coca-Cola Europe or Ebro Foods) and Víctor Urrutia (of another of the families Neguri). The paper company already sold 49% of its renewables business to the British manager Ancala in November 2020 for 387 million. Days later, it achieved 39 million in capital gains by selling for 168 million (including 81.5 million of net debt) the Puertollano thermosolar plant that it bought from Iberdrola in 2018.
The buyer of this facility in Puertollano was the fund manager Q-Energy, one of the most active firms in the sector, with some 4,000 million euros (debt included) invested in recent years in Spain. In Q-Energy, which plans to launch its fifth renewable fund in 2022, some of the largest Spanish fortunes participate through various funds, such as the Fluxá family (owners of the Iberostar hotel company), a branch of the Benjumea, the Gallardo ( owners of the pharmaceutical company Almirall), Torreal (owned by Juan Abelló) and Los Riberas.
The latter, owners of the automotive components manufacturer Gestamp, have carried out several multi-million dollar divestments in the sector. The most recent, the sale in March 2021 of 80% of Elawan Energy, formerly Gestamp Wind, to the Japanese group Orix for 790 million.
More recent has been the landing, in November, of Amancio Ortega, in renewables. The greatest fortune in Spain, than in 2021 dramatically increased its presence in the energy sector By joining REE and its Portuguese counterpart REN, it has bought from Repsol 49% of a 335 MW macro-complex in Zaragoza that has been operating since March. The oil company bought this project in 2019 from Forestalia, one of the winners of the last renewable auction held in October and which already swept 2016 and 2017. This Aragonese group has specialized in recent years in giving the pass to many of its projects to operators such as BP, CIP, Bruc Energy, Repsol itself, or local groups such as the Aragonese construction company Sumelzo or the Yarza, owners of the Heraldo de Aragón.
The day Repsol announced the entry of the Inditex owner into renewables, the result of one of last year's operations in Spain was known: the French giant Engie announced the purchase of Eolia, one of the largest groups in the sector, with some 900 MW installed and a project portfolio of 1.2 GW. Hand in hand with the French bank Credit Agricole, Engie beat groups like Naturgy or the Austrian Verbund. It paid more than 2,000 million, compared to the 1,400 million that the seller, Aimco, disbursed only three years earlier.
This Canadian fund had bought Eolia from Oaktree, another of the funds that took advantage of the cuts applied by the PP Government to acquire demolished renewable assets. Other firms such as Cerberus (which acquired Renovalia) or KKR also took advantage of this situation. The latter partnered with Acciona in 2014 for its international renewables business. The alliance lasted until April 2020, when KKR sold its 33.3% to Axa and the Entrecanales family group. In 2021, Acciona carried out the major operation of the sector on the stock market, placing 17% of its Energy division on the market for about 1,400 million.
KKR also bought 80% of Gestamp Solar (renamed X-Elio) from the Riberas family in 2016, and in 2019, in parallel with the final departure of the owners of the automotive components group, it reduced its stake to 50% to share the company with Brookfield, who paid in exchange about 440 million. Subsequently, in August 2020, the two sold 13 X-Elio PV plants to China Three Gorges.
This Chinese state giant is betting heavily on Spain. In February 2021, it acquired more than 400 MW of wind power for around 500 million from a group of investors led by another of the great Spanish fortunes, the Masaveu. It is the old Borawind portfolio, which the Asturians bought in 2016 from Bridgepoint and which in turn this fund had acquired in 2012 for around 400 million.
Other investors who in the past undid positions in renewables are now returning with new vigor. This is the case of ACS, one of the companies that has brought the most juice to the sector in recent years. The group chaired by Florentino Pérez has teamed up with France's Vinci this year to develop green projects after selling Saeta to Brookfield a few years ago or closing an alliance with the Portuguese oil company Galp.
In contrast to the distributed model that prevails in other European countries, in recent years the macroparks model has prevailed in this business, the impact of which has put some territories on guard and is a consequence of the "excessive speculation of large investment funds ", denounced a few months ago the National Association of Photovoltaic Energy Producers (Anpier), which groups together small photovoltaic producers.
Faced with the ambitious goals for the installation of renewables contemplated in the National Energy and Climate Plan (PNIEC), the avalanche of projects has led to a colossal administrative traffic jam that has forced the Government to give an extra period to avoid expiration of permits of connection that were going to begin to expire from December, by virtue of the system of milestones that the Executive implemented in 2020 to stop the gigantic stock market of speculation around these authorizations.
The wave of operations in renewables did not abate last fall, despite the decree approved by the Government to cut income to large electricity companies (later corrected) due to the rise in the price of the wholesale market. Among the notices about its effects on the country's legal insecurity, transactions such as the entry of the Egyptian group EFG Hermes in the capital of Ignis Energía, from the Sieira family, for 625 million.
After 2021 in which the price of the so-called pool has pulverized all records, with 27 records since July, the renewable sector can boast of having allowed Spain to mitigate to some extent the effect of the stratospheric rises in the price of natural gas. And so far it has emerged unscathed from the Government's measures to contain this escalation. The Ministry for the Ecological Transition, which does not want to repeat the experience of the complaints of foreign investors to Spain for the cuts of the PP, has so far ruled out the idea of applying an adjustment to the remuneration of the oldest plants, those under the regime known as RECORE.
Spain remains one of the most attractive countries to invest in this sector. The latest RECAI index from the consulting firm EY places the country in the number ten position worldwide and among the most attractive in Europe, only behind France, the United Kingdom and Germany, thanks to its leadership in the market for supply contracts of long-term energy (known as PPA) and the good prospects for the floating offshore wind business, for which the Government has just published a roadmap that aims to make Spain a leader in this technology in the EU.
Another of the big bets is hydrogen, with a specific PERTE it has already approved (Strategic Project for the Recovery and Economic Transformation) of Renewable Energies, Renewable Hydrogen and Storage (ERHA). This includes measures to promote the repowering of wind farms, with support schemes to encourage the recycling of wind blades. A key aspect if one takes into account that at present almost 12% of wind farms are more than 20 years old and are facing the last years of their useful life.