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Renewable Energy M&A: Iberdrola farms down 49% stake in ~1.3 GW renewables portfolio in Spain to Norges Bank Investment Management (NBIM) for ~€600mn

image credit: Enerdatics
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The agreement values 100% of the portfolio at €1.2bn, and reportedly represents an EBITDA multiple of 15 on the asset’s earnings in 2025. No external debt financing will be involved in the transaction. Of the total capacity, currently, 137 MW is operational in Castilla-La Mancha and Aragón, while the remaining projects are under-development primarily in Andalusia, Extremadura, Aragón, and Castilla y León. The power plants are expected to be operationalized during 2023-2025, following which they will be acquired by NBIM. About 80% of the under-development capacity is solar PV assets, with the remaining 20% coming from onshore wind. Iberdrola, which holds a 51% stake in the portfolio, will satisfy operations & maintenance (O&M) requirements for the assets, in addition to providing other corporate services. Iberdrola and NBIM aim to extend their relationship to similar partnerships in several other countries in the future.

NBIM, which owns 3% of Iberdrola’s share capital, is the manager of Norway’s €1.4tn sovereign wealth fund. As per Enerdatics’ data, the transaction with Iberdrola marks only the second asset-level investment for the bank, the first being a $1.6bn deal for a 50% stake in the operational 752 MW Borssele 1 & 2 offshore wind farm in the Netherlands. Identifying projects that meet the bank’s investment mandate has been challenging, and taking direct stakes in renewable energy projects is a bold new direction for the fund, according to its CEO.

The recent deal is a part of Iberdrola’s plan to farm down minority stakes in renewable developments to finance its €47bn, 3-year investment plan devoted to renewable energy power plants and transmission infrastructure. The transaction closely follows the sale of a 49% stake in the operational 350 MW Wikinger offshore wind farm in Germany, to private equity firm Energy Infrastructure Partners (EIP) for $705mn.

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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