CVC Leads $1.3 Billion Deal to Back UK Energy Firm Low Carbon
(Bloomberg) -- British green-power developer Low Carbon has raised £1.1 billion ($1.3 billion) in a deal that will result in CVC Capital Partners becoming the company’s majority owner.
The investment, which CVC is doing via its infrastructure arm, will help Low Carbon expand its renewable electricity business in the UK and Europe as the region tries to cut dependence on natural gas by relying more on cleaner alternatives. Massachusetts Mutual Life Insurance Company, an existing shareholder in Low Carbon, also contributed funds, according to a statement on Monday that didn’t disclose how much each party invested.
“As a private markets company, we’re clearly looking for attractive risk returns through cycles,” Caine Bouwmeester, partner and head of renewable energy at CVC DIF, said in an interview. “From our perspective, it’s quite an attractive entry point in the market.”
It’s the latest in a string of major private market allocations to renewable power deals this year. Last month, Apollo Global Management Inc. agreed to invest $6.5 billion in a huge Orsted A/S offshore wind farm in the UK. Brookfield Asset Management has done a series of big green power deals, and Copenhagen Infrastructure Partners closed its largest-ever renewables fund with €12 billion back in March.
The dealmaking is playing out against a backdrop of near-insatiable demand for energy to help power AI data centers as well as a general rise in electrification. That’s fed a spike in valuations of publicly traded clean energy companies, with the S&P Global Clean Energy Transition Index up 45% this year, compared with a 16% increase in the S&P 500 Index.
The funding from CVC and Mass Mutual will allow Low Carbon to accelerate its development of solar parks as well as onshore wind farms and battery storage in the coming years, particularly in core markets such as the UK, Germany and Poland. The company has a project pipeline of some 16 gigawatts as well as 1 gigawatt of assets that are operational or under construction.
CVC’s investment in Low Carbon will be done via its DIF Infrastructure VIII fund.
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