EQT, the multi-strategy Swedish private equity firm, is substantially injecting capital into the U.S. renewable energy sector; according to a Wall Street Journal report, the firm has already invested $12 million in the U.S.
Firstly, earlier this month the company agreed to acquire solar energy developer Cypress Creek Renewables. This was the firm’s first investment in the U.S. renewable sector; in fact, the deal was valued in around $2 billion, according to a person familiar with the matter.
Secondly, back in July, the company agreed to acquire Covanta Holding Corp., a U.S. operator of waste-to-energy plants, for $5.3 billion. And finally, last week, the firm closed its purchase of FirstGroup PLC’s North America transport operations for $4.6 billion.
Thirdly, according to the WSJ, those funds are coming out from the company’s most recent capital structures; the EQT Infrastructure V. Back in march, the company said it had collected $12,5 billion euros; which are equivalent to $14,7 billion US dollars for the fund; with the intentions to further grow it to $15 billion euros.
Moreover, renewable energy is precisely the main sector that this fifth funs is targeting, said Alex Darden, a partner with EQT’s infrastructure arm. He also said, quoted by the WSJ, digital infrastructure and transportation areas where also the fund’s target to invest.
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EQT does not see danger with increased competition
In addition, the newspaper also reported several other investors were injecting capital into the U.S. green energy sector; Carlyle Group Inc., for instance, is launching a renewable energy-infrastructure unit called Copia Power; and also plans to invest as much as $700 million through the new venture, as we reported previously.
On the other hand, according to data from Prequin Ltd., during the first half of 2021, private equity firms invested $22.9 billion across 594 renewable-energy deals in the U.S. Which is slightly less than the $24.2 billion invested in the same period of last year; when there were six fewer transactions.
Furthermore, large institutional investors are also driving investments into America. In fact, it has pumped more than $2 billion into North American infrastructure over the past 18 months; including a $2 billion investment in Generate Capital; a sustainable infrastructure investment firm in San Francisco; which gives QIC more exposure to distributed clean-energy projects.
Finally, EQT doesn’t see danger in that competition. “We believe that this is still the early innings of that game; even though it feels like we as a society have been discussing renewable energy for a long time. We like to think that there’s a ton of capital investment opportunities.” Said Alex Darden, a partner with EQT’s infrastructure arm.
