EFG Hermes Vortex platform completes acquisition of TerraForm 365 MW UK solar portfolio
EFG Hermes announced that Vortex, the European renewable energy platform managed by its private equity division, reached financial close today on its 100 per cent acquisition of a 365 MW portfolio of 24 operational solar assets in the United Kingdom from TerraForm Power.
The landmark transaction marks Vortex’s first investment in the solar energy sector and increases Vortex’s total net operational capacity to 822 MW.
“In well under four years, Vortex evolved rapidly to become one of the largest renewable energy-focused investment vehicles in Europe with a wide range of solar and wind assets spreading across six countries in Europe, generating more than 1,500 GWh of renewable energy which is enough to power more than 350,000 households each year,” said Karim Moussa, Head of Asset Management and Private Equity at EFG Hermes. “Vortex’s success to date underpins our transformation from being a manager of investments across MENA to being an investment manager that caters to our client’s specific needs in our region and beyond. Vortex will continue to target wind and solar acquisitions in Europe with a target of owning a total of more than 2 GW in generation capacity within three years.”
Vortex signed the c. GBP 470 million transaction (enterprise value) in January 2017. The equity share capital of the transaction was funded through a 50 per cent subscription from Tenaga Nasional Berhad (“TNB”), one of the largest utility players in Asia with a market capitalisation of c. USD 18 billion and a power generation capacity of 13 GW. The remaining 50 per cent of the equity ticket was underwritten by EFG Hermes consistent with the merchant banking model that it announced last year.
Accordingly, Vortex plans to sell down 45 per cent of the equity share capital of the transaction in the near future, retaining a five per cent stake in line with its previous transaction structures. Vortex is also in the process of refinancing the portfolio’s existing debt facilities.
Since its launch in late 2014, Vortex has successfully invested more than EUR 1.3 billion in the European renewables market. The UK solar portfolio joins an existing 457 MW (net) portfolio of operating onshore wind assets operated by EDP Renováveis SA across four Western European countries.