Asia Biz News - Asian Business News and Tenders
National Electric Utility of Malaysia Acquires 365 MW of UK Solar Power Assets
May 15, 2017
Tenaga Nasional Berhad (TNB), the national electric utility company of Malaysia, has acquired a 50% interest in one of the biggest UK-based portfolios of solar power assets. The acquisition has a combined capacity of 365 MW.
TNB is one of the largest utility companies in Asia with a market capitalization of approximately USD 18 billion and a total power generation capacity of around 13GW, predominantly in Malaysia. The c. GBP 470 million transaction is TNB's first investment in renewable generation capacity in Europe. The acquisition was made as part of TNB's ongoing five-year international expansion plan and achieves one it is main objectives, to acquire up to 250 MW of renewable energy capacity by 2020.
The acquisition was made via Vortex Solar UK Limited, an indirect wholly owned subsidiary of a TNB joint venture, Vortex Solar Investment S.a.r.l. ('Vortex'), which acquired a 100% interest in the portfolio. TNB has a 50% shareholding in Vortex alongside Beaufort Investments S.a.r.l. which holds the balance of 50%.
Vortex Solar UK Limited signed a Sale and Purchase Agreement in January with a subsidiary of Terraform Power Inc. to acquire the solar portfolio which includes 24 solar photovoltaic farms, one of Britain's largest solar power portfolios.
TNB funded the acquisition from the proceeds of a US$750 million sukuk issued by the company in October 2016.
Datuk Seri Ir. Azman bin Mohd, TNB's CEO, said: "We are pleased to complete this acquisition, which was a rare opportunity to acquire a sizeable solar power business in the UK. The acquisition also helps us deliver the renewable energy part of TNB's international expansion plan more than one year ahead of schedule."
"The assets are an excellent investment and are earnings enhancing, with 80% of revenue under long term, 15-year power purchase agreements and subsidized by Renewable Obligation Certificates for 20 years."
With the completion of the acquisition, TNB's international renewable energy portfolio will have a combined net installed capacity of 252 MW following acquisitions in power companies in India and Turkey in 2016.
Tenaga Nasional Berhad
Tenaga Nasional Berhad (TNB) is Malaysia's only electric utility company. Its core activities are in the generation, transmission, and distribution of electricity. In addition to being the nation's primary electricity generation enterprise, TNB also transmits and distributes all the electricity in Peninsular Malaysia, Sabah and Federal Territory of Labuan. As at 31 August 2014, TNB supplies electricity to approximately 8.6 million customers.
TNB, through its subsidiaries, is also involved in the manufacturing of transformers, high voltage switchgears and cables; the provision of professional consultancy services, construction and operating and maintenance of district cooling facilities, generation equipment, repair and maintenance, fuel supply services; services related to renewable energy, energy efficiency and power quality; higher education and skill training and undertakes research and development.
For further information, please visit www.tnb.com.my
Beaufort Investments S.a.r.l.
Beaufort Investments S.a.r.l., is the investment manager of Vortex. Vortex was established in 2014, sponsored by EFG Hermes, to pursue yielding renewable energy investments in Europe. Vortex comprises a team of 10 dedicated infrastructure and private equity specialists with wide experience in global infrastructure and renewable energy investments and today manages 822MW of wind and solar assets spreading across six countries, making it one of the largest renewable energy focused investment vehicles in Europe
Since its launch in late 2014, Vortex has successfully invested more than EUR 1.3 billion in the European renewables market. The UK solar portfolio joins an existing 457MW (net) portfolio of operating onshore wind assets operated by EDP Renovaveis SA across four Western European countries.
TerraForm Power Inc.
TerraForm Power (Nasdaq: TERP): Terraform Power Inc. is a global owner and operator of clean energy power plants.