RIO DE JANEIRO, Oct 27 (Reuters) – BlackRock-managed fund Climate Finance Partnership (CFP) will make its first foray into Latin America with the acquisition of a minority stake in Brasol, a Brazilian renewable energy firm, BlackRock announced on Friday.
The stake will be “shy of 50%,” said portfolio manager Anmay Dittman, adding the investment will be a “test case” for future transactions in the region.
“We’re really excited to get a little bit of a beachhead in Latin America and hoping that we’ll find many more great investments,” Dittman said at a press conference.
CFP, a public-private fund which partners with the French, German and Japanese governments as well as some U.S.-based organizations, targets emerging market climate infrastructure.
CFP did not disclose the amount paid for the stake, but Brasol Chief Executive Officer Ty Eldridge said the cash injection will help the firm in its one-billion-real ($200.38 million) plan to increase energy generation capacity.
Brasol operates renewable energy assets and leases them to commercial and industrial clients.
Brasol plans to boost its generation capacity by 200 megawatts in the next 18 months, Eldridge said.
While solar, the firm’s “bread and butter,” will be a key focus, Brasol is also looking into other technologies, like electric vehicle charging, Eldridge said.
“I can’t tell you where every dollar is going to go,” he said. “But certainly it’ll go into this broad portfolio of energy transition assets, and it’ll be certainly more than just solar power.”
($1 = 4.9905 reais)
Reporting by Fabio Teixeira; Editing by Cynthia Osterman
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People walk along the beach on the Suffolk coast as the Sizewell B nuclear power station can be seen on the horizon, near Southwold, Britain, January 31, 2019. REUTERS/Russell Boyce Acquire Licensing Rights
LONDON, Sept 18 (Reuters) – Britain on Monday opened the search for private investment in the Sizewell C nuclear project, inviting potential investors to register their interest.
The building of the plant by French energy giant EDF in southeast England, capable of producing around 3.2 gigawatts of electricity or enough to power around 6 million homes, was approved in July 2022.
“The government, the Sizewell C Company and EDF, the project’s lead developer, are looking for companies with substantial experience in the delivery of major infrastructure projects,” a statement from the Department for Energy Security and Net Zero said.
The British government announced last year that it would support Sizewell C with around 700 million pounds ($895 million) while taking a 50% stake during its development phase.
“The launch of the formal equity raise opens another exciting phase for the project, following a positive response from investors during market testing,” said Sizewell C Company Joint Managing Director, Julia Pyke.
Reporting by Kylie MacLellan, writing by William James
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June 12 (Reuters) – Duke Energy Corp (DUK.N) said on Monday it has agreed to sell its unregulated utility scale Commercial Renewables business to Brookfield Renewable (BEP.N), (BEPC.N)
in a deal valued at about $2.8 billion.
Duke said it expects net proceeds of about $1.1 billion from the sale, which the company will use to help incorporate more than 30,000 megawatts of regulated renewable energy into its system by 2035.
The proceeds are also expected to help strengthen its balance sheet, avoid additional debt and improve grid reliability.
The deal comes at a time when electric utilities in the United States are largely shifting away from fossil fuels toward cleaner energy sources, including solar and wind, to meet climate goals.
Charlotte, North Carolina-based Duke is planning to spend $65 billion over the next five years, most of it directed toward its transition to low-carbon energy sources, the company’s CFO told Reuters last week.
Duke aims to reduce carbon emissions by more than 50% by 2030 and plans to retire all of its coal plants by 2035. Its goal is to achieve net-zero carbon emissions by 2050.
The sale agreement with renewable power assets operator Brookfield Renewable includes more than 3,400 megawatts of utility-scale solar, wind and battery storage across the United States, along with operations, new project development and current projects under construction, Duke said on Monday.
The deal is expected to close by the end of 2023, Duke said. Morgan Stanley & Co LLC and Wells Fargo Securities LLC are Duke’s financial advisers, with Skadden, Arps, Slate, Meagher & Flom LLP serving as legal counsel.
Duke, which initiated the sale process for the commercial renewables unit in November, reported a smaller-than-expected first-quarter profit last month, hurt by unfavorable weather, lower volumes and higher interest expenses.
Reporting by Deborah Sophia in Bengaluru; Editing by Krishna Chandra Eluri and Pooja Desai
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SYDNEY, March 28 (Reuters) – Brookfield Asset Management (BAM.TO) will spend about $13.3 billion over the next decade to replace Origin Energy’s (ORG.AX) Australian power generation infrastructure with new-build renewables and storage facilities, a senior executive said on Tuesday.
Origin Energy on Monday agreed to a A$15.35 billion ($10.21 billion) takeover offer from a consortium led by Canada’s Brookfield, nearing the conclusion of one of the country’s biggest private equity-backed buyouts.
Australia’s No. 2 power producer has been looking to speed up its transition to cleaner energy, accelerating the planned shutdown of the country’s biggest coal-fired power plant and selling its gas exploration assets.
“Our plan is to invest a further A$20 billion of capital to fully replace its power generation and its power purchases with green power that meets all of its customers requirements, and we propose to do that over a 10-year period well in advance of the 2050 goal,” Brookfield Asia Pacific CEO Stewart Upson told Reuters in an interview, referring to a target for net-zero direct and indirect emissions by 2050.
The Canadian firm enlisted Singaporean funds GIC and Temasek [RIC:RIC:TEM.UL] as co-investors in its bid, while MidOcean Energy will gain control of Origin’s 27.5% stake in Australia Pacific LNG (APLNG).
Upson said Brookfield currently has about $60 billion invested in Australia, but the Origin deal would represent a “step change”.
Argo Investments (ARG.AX) Senior Investment Officer Andy Forster said his firm, the ninth-biggest investor in Origin, was positive about the deal, even though it might take time to gain regulatory approvals from the Foreign Investment Review Board and the competition regulator.
“Brookfield seems very committed to making the deal happen,” he added.
Shares were trading 1% higher at A$8.255 on Tuesday morning, below the implied cash-and-scrip offer price of A$8.91 a share, as the deal is not expected to be finalised until early 2024.
The Brookfield-led consortium trimmed its offer for Origin by 1% last month after a government move to cap gas prices hit valuations in the sector.
“We had to take our time to assess all the different developments and make sure that we are comfortable it didn’t have an impact,” Upson said.
Banking industry volatility also slowed the deal, but the financing was fully committed and was not affected, he added.
($1 = 1.5031 Australian dollars)
Reporting by Praveen Menon and Scott Murdoch; Editing by Jamie Freed
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MUMBAI, Feb 14 (Reuters) – Two large companies within India’s embattled Adani Group are likely to repay their short-term commercial paper (CP) debt as they come due over the next few months, instead of rolling them over as is normal, two merchant bankers and a company official directly familiar with the matter said.
The two group companies have about 50 billion rupees ($605 million) worth of CP due to mature through March, data shows, while exchange data shows the flagship Adani Enterprises Ltd (ADEL.NS) has redeemed a total of 2.5 billion rupees of CP since Jan. 25.
That is a day after U.S. short-seller Hindenburg Research accused the group of improper use of offshore tax havens and stock manipulation – allegations the group has denied – that sparked about a $120 billion loss in the group’s market value on concerns including about its ability to refinance debt.
Adani Enterprises and Adani Ports and Special Economic Zone Ltd (APSE.NS) regularly raise funds by issuing CPs – short-term debt instruments issued to meet working capital requirements.
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“We will repay the CPs as and when they mature and are currently not looking to tap the short-term debt market,” an official with one of the companies said on condition of anonymity as they are not authorised to speak to the media.
The official said payments are being made as the securities mature and the company has not got any requests for early redemptions.
“All payments are being made as per schedule,” an Adani group spokesperson said in an e-mail, but did not respond to queries on whether investors are seeking early redemption.
Adani Ports has CPs worth 35 billion rupees due to mature through end March, data from information service provider Prime Database showed.
Adani Enterprises has CP worth close to 15 billion rupees due to mature over February-March and more than 2 billion rupees worth due for redemption from April through January 2024, the data showed.
The Adani Group is unlikely to roll over this debt as it comes due, two bankers said on condition of anonymity as they are not permitted to speak to the media.
“Market sentiment is such that people will be cautious to immediately roll over CPs, and would prefer to cash out. So, we may see them (Adani Group) staying away from the market for some time,” said one banker, who regularly arranges debt issuances for the group.
A second banker, who advises the conglomerate on local borrowings, added the group has not reached out to its bankers asking for a rollover.
“The Adani group generally gets in touch with bankers some days prior to the maturing CPs but has stopped any sort of intimation, hinting that they may look to repay the existing CP holders,” this person said.
Apart from short-term borrowings, Adani Enterprises has not moved forward with plans to launch its debut retail bond issue of up to 10 billion rupees, while Adani Green Energy Ltd (ADNA.NS) has also stayed put on a planned 1.5-billion rupee, 10-year bond offering, according to bankers, including the two mentioned earlier.
“There’s been no communication from the companies on previously proposed bond issuances,” said a merchant banker with a brokerage firm and directly involved in the arrangement.
The Adani Group spokesperson denied media reports that these bond issues have been scrapped, saying this is “speculation” and “not true” in a reply to Reuters’ mail.
($1 = 82.6390 Indian rupees)
Reporting by Bhakti Tambe; Editing by Savio D’Souza
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Feb 13 (Reuters) – Freeport LNG sought permission from federal regulators on Monday to restart commercial operations at its long-idled liquefied natural gas (LNG) export plant in Texas, a move that could soon provide the world with another much needed source of the super-cooled fuel.
The amount of gas flowing from U.S. pipelines to Freeport jumped on Monday to its highest since the facility was shut by a fire in June 2022 after the company restarted one of the plant’s three liquefaction trains, which turn gas into LNG for export.
But energy regulators and analysts have said they do not expect Freeport, the second-biggest U.S. LNG export plant, to return to full commercial operations for months.
In a filing with the U.S. Federal Energy Regulatory Commission (FERC) on Monday, Freeport asked for permission to put what it called Phase 1 of its restart plan into commercial operation.
Phase 1 includes the full restart of the plant’s three liquefaction trains, two storage tanks and one LNG loading dock.
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Freeport said it would appreciate an answer from FERC on Monday “if at all possible,” as it was ready to restart liquefaction Train 2 now and expects to be ready to restart Train 1 in the next few weeks.
Gas flows to the plant were on track to reach 0.5 billion cubic feet per day (bcfd) on Monday, according to data provider Refinitiv, up from an average of 43 million cubic feet per day since federal regulators approved Freeport’s plan to start cooling parts of the plant on Jan. 26.
That is still only a fraction of the 2.1 bcfd of gas Freeport can turn into LNG when operating at full power. One billion cubic feet of gas is enough to supply about 5 million U.S. homes for a day.
Despite the increase in feedgas flows to Freeport, U.S. gas futures fell about 5% on Monday, putting the contract on track to close at a 25-month low.
That is because the gas market was more focused on a decline in domestic demand for the fuel for heating with the weather expected to remain mostly warmer than normal for the rest of February.
FULL OPERATIONS STILL MONTHS AWAY
On Saturday, Texas residents grilled U.S. energy regulators over their supervision of Freeport and other LNG plants.
Bryan Lethcoe, a regional director at the U.S. Pipeline Hazardous Materials Safety Administration (PHMSA), said it would take “a number of months” for Freeport to return to full operation.
That is similar to the “mid-March or later” timeframe many energy analysts have projected for Freeport’s full return.
Officials at Freeport had no comment.
A couple of Freeport’s customers – Japan’s JERA (9501.T), (9502.T) and Osaka Gas (9532.T) – have said they do not expect to get LNG from the plant until after March.
Freeport’s other big buyers include units of BP PLC (BP.L), TotalEnergies (TTEF.PA) and SK E&S.
BP’s Kmarin Diamond was the first vessel to pick up LNG at Freeport since the plant shut.
The tanker, which has already left the facility and is on its way to the Suez Canal in Egypt, picked up LNG to create space in Freeport’s storage tanks for new LNG expected to be produced.
There is already another vessel at the plant – Prism Agility – operated by South Korea’s SK E&S, according to Refinitiv and other ship tracking data.
Reporting by Scott DiSavino; Additional reporting by Deep Vakil in Bengaluru; Editing by Marguerita Choy and Paul Simao
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Jan 31 (Reuters) – Japanese trading firm Marubeni Corp (8002.T) started commercial operation based on the feed-in tariff program for renewable energy at Akita Port offshore wind farm on Tuesday, it said in a statement.
Japan’s offshore wind power market, part of the country’s goal to be carbon neutral by 2050, is set to grow as the government eyes installing up to 10 gigawatts of offshore wind capacity by 2030, and up to 45 gigawatts by 2040.
Marubeni’s 100 billion yen ($768 million) project of two wind farms with 140 megawatt capacity at Akita Port and Noshiro Port in northern Akita prefecture is Japan’s first large-scale commercial offshore wind power project.
With its Noshiro Port offshore wind farm operating since late December last year, the launch of the Akita Port farm brings the project to the full-scale operation, Marubeni said.
Power from the two wind farms will be sold to Tohoku Electric Power for 20 years under a power purchase agreement based on the feed-in tariff program.
Marubeni’s 12 partners include Obayashi Corp, Tohoku Sustainable & Renewable Energy Co, Cosmo Eco Power Co, Kansai Electric Power Co and Chubu Electric Power Co.
($1 = 130.2900 yen)
Reporting by Katya Golubkova, Editing by Louise Heavens
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SEOUL/TOKYO, Dec 7 (Reuters) – South Korean and Japanese power utilities are sustaining heavy losses, kept from passing rising generation costs on to customers and, according to analysts, forced to reconsider the timing of green investments.
The industry is squeezed between high costs of imported fuel, exacerbated by weak currencies, and government unwillingness to displease voters and worsen inflation with price rises.
During the first nine months of this year, state-run electricity distributor Korea Electric Power Corp (KEPCO) reported record operating losses of 21.83 trillion won ($16.69 billion) on revenue of 51.8 trillion won, compared with a loss of 1.12 trillion won a year earlier.
KEPCO is staying afloat with bond issuances and bank loans. Debt had already reached 223% of equity capital at the end of 2021.
However, President Yoon Suk-yeol’s approval rating, just 39% this month, is too low for him to dare to allow a bigger rise in electricity prices than the approximately 13% approved for this year and a similar one for 2023, analysts said.
“In order for KEPCO to swing to profit, we estimate electricity prices must be at least 30% to 40% higher than last year, or the Dubai oil spot price must fall to pre-COVID levels,” said Na Min-sik, analyst at SK Securities.
KEPCO said it had no plans to cut maintenance budgets or facilities investments.
But analysts told Reuters that KEPCO’s capital spending would drop about 20% next year. Items likely to be cut would be improvements to transmission grids to support highly variable electricity flows from renewable sources, they said.
“Since renewable power fluctuates, investment is necessary in transmission infrastructure to grow the portion of renewables in energy mix,” Na said. “But it’s a burden, as 30 trillion won in losses are forecast this year, and continued losses next year.”
Another analyst said: “Out of new power plant construction, maintenance of existing plants and power grid infrastructure, the biggest delays will be in new power plant construction, especially in renewables.”
WHOLESALE PRICE CAP
Moreover, South Korea this month decided to cap for at least three months the base rate at which KEPCO buys electricity wholesale from generation firms.
This will discourage investment in renewable generators, according to an industry association.
“We estimate this could cost us revenues of 90 won per kilowatt. If this cap is extended for a year, it would cost a 10 megawatt generator 100 million won,” said Jung Woo-sik, an executive at lobby group Korea Photovoltaic Industry Association. “We’ll lose investments. This will cripple the renewables industry.”
As for Japan, nine out of 10 key regional electricity utilities booked a net loss for the April-September half-year, with five companies reporting record losses for the period.
All eight utilities that have announced an annual forecast for the fiscal year to March 31, 2023, have warned of a net loss. Tokyo Electric and Kyushu Electric did not provide full-year outlooks.
Most of those that have applied for price rises have said they would maintain green investment, but analysts expect some deferral.
“Investment towards decarbonisation by Japanese utilities may be delayed as the companies seeking to hike prices are saying that they would review all new investments,” said Toshinori Ito, president of Ito Research and Advisory which specializes in energy markets.
By the end of November, five out of 10 major regional utilities had applied to raise prices by between 28% and 46% from April.
They said their financial situation had deteriorated sharply due to soaring fuel prices due to Russia’s invasion of Ukraine and the yen’s plunge against the U.S. dollar. That could hinder stable supply of electricity, they said.
The Japanese industry ministry will examine whether each company’s efforts to improve management efficiency, such as reducing labour costs, are sufficient.
($1 = 1,308.2600 won)
Reporting by Joyce Lee in Seoul and Yuka Obayashi in Tokyo; Editing by Bradley Perrett
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