Mirova-backed consortium acquires hydro portfolio in Portugal

The French fund manager will finance its portion of the €2.2bn acquisition through its recently closed European renewables fund and a co-investment vehicle created for this specific transaction.

A consortium led by French utility Engie, and including Crédit Agricole Assurances and Mirova, is acquiring a 1.7GW hydroelectric portfolio, the second-largest in Portugal, for €2.2 billion.

The group secured the deal through a competitive process conducted by Portuguese electric utilities company EDP.

In a joint statement, the companies said the assets comprising the portfolio – three newly commissioned pump storage units and three recently repowered run-of-the-river plants – are part of the Douro River system, located in the north-east of Portugal, and have a weighted average remaining concession term of 45 years.

Engie, the industrial partner and leader of the consortium with a 40 percent stake, will operate and maintain the portfolio as well as provide energy management services.

Roughly 30 percent or €650 million of the total purchase price will be financed through debt; the rest will be equity.

Mirova, which focuses on sustainable investment, will finance its portion of the investment – it holds a 25 percent stake in the consortium – through Eurofideme 4. It closed the vehicle on €857 million in November, making it the largest European renewables fund raised to date.

“The fund will invest between €130 million and €170 million out of €420 million in equity,” Mirova’s head of energy transition funds Raphael Lance told Infrastructure Investor. The balance of between €250 million to €290 million will be invested through a co-investment vehicle created specifically for this transaction, he said.

Including this latest transaction, which is expected to close in the second quarter of 2020, Eurofideme 4 will be roughly two-thirds deployed.

Other investments Mirova has made through the fund include a 20MW wind farm in France and a 30MW hydroelectric portfolio composed of four plants in Portugal, all of which are in operation. Other assets in the fund’s portfolio at various stages of construction include one 40MW onshore wind farm in Norway; the Phoenix project, which comprises several clusters of onshore wind farms in Spain, with a generating capacity of 342MW, in partnership with Engie and Spanish renewables developer Forestalia; and three wind farms in Poland that have been developed by French renewables developer Akuo, which will generate 132MW once completed.

Mirova is an affiliate of Natixis Investment Managers. It has been investing in renewables for the past 17 years with over 2GW of installed capacity across more than 180 wind, solar, hydro and biomass projects in Europe.

Mirova used to invest in other infrastructure sub-sectors, but in June, Natixis spun off the core infra team into a new asset manager, Vauban Infrastructure. The renewables team was kept at Mirova, and since then has focused solely on impact investing.