AlternativesOctober 14, 2020

CDPQ Expands into Renewable Energy Infrastructure in Spain

The Canadian pension plan continues its growth in sustainable investments around the globe.

Reported by Sarah Min

Global institutional investor Caisse de dépôt et placement du Québec (CDPQ) is expanding into renewable energy infrastructure in Spain with a purchase of solar assets.

The purchase of a portfolio of 73 solar power systems is the first equity infrastructure investment in Spain for the Quebec pension fund, renewable energy manager and investor Q-Energy said Tuesday. The assets bought through the Q-Energy III Fund will supply enough electricity to support more than 115,000 households.

“With this transaction, we are laying the foundation of our renewables platform in Spain, which will allow us to progressively increase our presence in this key renewable market and achieve CDPQ’s carbon intensity reduction targets,” CDPQ Executive Vice President and Head of Infrastructure Emmanuel Jaclot said in a statement.

Q-Energy, which started in 2007 and operates 150 renewable energy plants across Spain, Italy, and Germany, will continue to manage the assets for CDPQ.

CDPQ is one of the largest institutional investors in renewable energy with a 2050 carbon neutral target. Its other renewable investments include a $75 million reinvestment in Indian solar power producer Azure Power Global and a reinvestment into electric vehicle charging company AddÉnergie. The pension fund is also funding solar and wind farms in France, Mexico, and the United Kingdom.

The Quebec pension fund has about $21.2 billion, or about 8% of its $253 billion total portfolio in infrastructure assets. In the first half of 2020, CDPQ lost 2.3% in asset value, while its infrastructure allocation lost 1%. The pension fund said the infrastructure portfolio is showing some resilience despite exposure to the transport sector, which is hard hit from the pandemic.

The solar transaction is expected to close in the coming months. The Royal Bank of Canada and Cuatrecasas advised Q-Energy on the deal. BNP Paribas and Watson Farley & Williams counseled CDPQ.