CPPIB Adds $1 Billion to Energy Portfolio

With no signs of slowing down the ESG train, the C$337.1 billion ($294.7 billion) Canada Pension Plan Investment Board (CPPIB) has kicked off April by bolstering its energy assets by nearly $1 billion.

On Monday, the fund announced it had acquired a portfolio of six Canadian wind and solar energy projects from NextEra Energy Partners for $741 million. CPPIB then revealed Tuesday it had also raised its stake in ReNew Power Ventures, investing an additional $247 million to help ReNew Power’s acquisition of Indian renewable energy developer Ostro Energy Private Limited. Combined with its initial $144 million investment in January, the CPPIB’s total stake in ReNew Power is $391 million.

“CPPIB’s support demonstrates their continued confidence in our capabilities to further grow our market position and their ongoing help to transform ReNew Power into one of the leading clean energy companies in India,” said Sumant Sinha, chairman and CEO of ReNew Power, in a statement.

The NextEra portfolio features four wind and two solar projects with a total power capacity of 396 megawatts in Ontario, while the aided acquisition of Ostro Energy will bring ReNew Power’s total capacity to more than 5,600 megawatts. Affiliates of NextEra and portfolio developers/operators will continue to manage the portfolio under a long-term agreement.

Based on 2019 estimates, the NextEra transaction is valued at 10x EBITDA and a 10% cash yield.

“This opportunity to acquire a sizeable portfolio of operating renewables projects provides immediate scale and exposure to a core sector for CPPIB’s broader North American and global power and renewables strategy,” said Bruce Hogg, managing director, head of power and Renewables, CPPIB.