Demand for renewable energy harnessed by solar energy and energy storage in the US and Italy prompted Intermediate Capital Group (ICG), a London-listed global asset manager, to invest in Enfinity Global, a Miami-based independent power producer (IPP) seeking to deploy more than 17 gigawatts of solar and storage assets in three continents, ICG managing director of infrastructure Jérôme Sousselier told PE Hub.
“Both the US and Europe were interesting markets to ICG even before the [August 2022 signing of the] Inflation Reduction Act,” Sousselier said. The IRA, which shores up more than $380 billion in federal subsidies for US renewable energy development, makes Enfinity an even more compelling investment based on a large growth trajectory for the target, he said.
Last week, Enfinity announced a €400 million ($428 million) equity commitment from ICG Infrastructure, an infrastructure investment fund of the asset manager, making the fund a significant shareholder in the management-backed energy developer. Funding for the company came from ICG’s second infrastructure fund.
ICG was referred to Enfinity in 2022 through a connection with a company manager, though the company had been in the market in late 2022 with Barclays as its financial adviser for a Series C growth equity raise, Sousselier said.
Astris is ICG’s financial adviser for the investment while Cahill Gordon & Reindel LLP is its legal adviser.
ICG for its part as a core infrastructure investor has had a busy 2022 and 2023 in renewable energy. Over the past 12 months the firm has invested in five project developers: British Solar Renewables, CVE Group, Dos Grados and Akuo Energy, all of which are European-based project developers with some interest in the US. Enfinity has the largest focus on the US market of ICG’s investments, Sousselier said.
ICG raised €1.5 billion in an oversubscribed fund raise for its first infrastructure fund in March 2022, which funded European clean energy investments, while Enfinity is being funded out of its second infrastructure fund.
As a private equity investor, ICG practices a “core-plus” middle-market investment model, which seeks investments in high-growth private diversified industrials and sustainable infrastructure companies with enterprise value of €100 million to €2 billion.
Formed in 2018, Enfinity is comprised of executives that previously managed SunEdison and TerraForm Power, both renewable energy development and IPPs that deployed gigawatts of utility-scale and commercial solar and wind assets over the last decade.
For Enfinity, its new financial sponsor will bolster the developer’s balance sheet to accelerate the completion of a sizable 17GW project portfolio, which includes 7.3GW of energy storage assets. The US represents about 49.5 percent of the company’s development portfolio. Currently Enfinity operates 1GW of global solar and storage assets in the US, Italy, Japan and India, with plans to install about 2GW of assets in the UK as well.
“The investment underpins our approach of supporting entrepreneurial and visionary founders who are committed to making meaningful contributions to a more sustainable economy,” said Guillaume d’Engremont, head of infrastructure at ICG.
ICG is a London Stock Exchange-listed asset manager with $82.1 billion of global assets invested across the capital structure in structured and private equity, private debt, real assets and credit.
Solar deals ramp up
Dealmaking in the renewable energy market picked up steam following the Labor Day weekend, with three announcements involving solar developers as targets, including Enfinity.
On September 7, Soltage LLC sponsor Prudential Private Capital agreed to a sale of a majority interest in the Jersey City, New Jersey-based developer of rooftop commercial and utility-scale solar projects to Igneo Infrastructure Partners for undisclosed terms. Macquarie Capital was financial adviser to Igneo on the deal, while Citi advised Soltage.
Announced the same day, Houston-based energy investor Quantum Capital Group announced the sale of ConnectGen, also a solar and wind developer based in Houston, for $768 million to Repsol, a Madrid-based energy major that has made two US renewable energy acquisitions to date. The target has an active development pipeline of more than 20GW of projects. Guggenheim served as financial adviser and Baker Botts served as legal counsel to Repsol. Wells Fargo and Nomura Securities served as financial advisers and Kirkland & Ellis served as legal counsel to Quantum and ConnectGen.