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Renewable Energy M&A: ENGIE acquires 1.25 GW of solar-plus-storage projects in Arizona from Revolve Renewable Power

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The transacted assets comprise the 250 MW Parker and 1 GW Bouse power plants, both of which will house co-located storage facilities. Consideration for the deal includes a $2mn upfront payment, with the remainder of the purchase price contingent on each of the projects reaching certain development milestones. The projects are currently in the early stages of development, with interconnection studies expected to be completed in 2023. ENGIE will assume responsibility for subsequent development activities on the project, including all financial liabilities. The terms of the agreement outline an option for ENGIE to sell both projects back to Revolve, based on the results of the interconnection studies. If ENGIE exercises this option, Revolve will repurchase the project while also refunding the incurred development expenses. 

The acquisition closely follows ENGIE’s purchase of a 6 GW of solar-plus-storage and standalone storage asset pipeline in the US from Belltown Power. The projects are located in the ERCOT, PJM, MISO, and WECC power markets. As per Enerdatics’ research, the Revolve Renewable deal marks ENGIE’s third gigawatt-scale acquisition in the US since the start of 2022, with its largest deal in the country being the takeover of France-based Photosol’s 9 GW pipeline of solar-plus-storage assets, which are also located in the ERCOT, PJM, MISO and WECC territories. The company appears to be consolidating large portfolios of early-stage assets with tremendous upside potential arising from measures included in the recently approved Inflation Reduction Act (IRA). 

Interestingly, ENGIE kicked off 2023 with the issue of a €2.75bn, triple-tranche green bond that holds an average coupon rate of 3.93% and an average maturity of 12.4 years. The bonds were over-subscribed to 2.4X the issue amount and priced in line with the secondary market levels, with no new issue premium. The proceeds from the bonds will be used to satisfy ENGIE’s financing requirements for 2023 and strengthen the group’s available liquidity.

The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.

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