{"id":6186,"date":"2020-12-21T09:47:02","date_gmt":"2020-12-21T17:47:02","guid":{"rendered":"https:\/\/solarpowerinvestor.com\/?p=6186"},"modified":"2020-12-21T13:30:32","modified_gmt":"2020-12-21T21:30:32","slug":"baywa-sells-stake-to-energy-infrastructure-partners","status":"publish","type":"post","link":"https:\/\/solarpowerinvestor.com\/baywa-sells-stake-to-energy-infrastructure-partners\/","title":{"rendered":"BayWa sells a 49% Stake to Energy Infrastructure Partners"},"content":{"rendered":"

Accelerating earnings growth with plans to transform BayWa r.e. into an independent power producer (IPP) with a total production capacity of up to 3GW in the medium term.<\/h2>\n\n\n\n

BayWa<\/a> has been signaling for a while now the need to access capital via a new partner to make the most of the existing growth in the market for renewables energy. It’s come through on those overtures, announcing that Energy Infrastructure Partners<\/a> (EIP, previously Credit Suisse Energy Infrastructure Partners) will Have a 49% stake in the team’s renewables company unit, BayWa r. e., for a total consideration of $642m. <\/p>\n\n\n\n

<\/p>\n\n\n\n

Together with our green bond successfully placed in 2019, we have thus acquired €1.03bn in less than two years on the capital market for the renewable energies business unit.<\/p>Klaus Josef Lutz<\/a>, CEO of Baywa AG<\/cite><\/blockquote>\n\n\n\n

Renewables already the company’s growth driver<\/h2>\n\n\n\n

Sales of completed energy projects doubled year-on-year in FY19 from 453MW to 912MW, including 12 free-standing solar parks with a total output of 620MW, a floating solar park of 8MW along with ten wind turbines with a combined output of 283MW. Projects spanned multiple continents, including Australia, Europe, Mexico and the US.<\/p>\n\n\n\n

At The end of FY19, the division also had 8GW of capacity under control. FY19 Segmental sales rose by 29% to a record $1,975.3m and EBIT by 39 percent to a record $101.1m, 54% of the group total. Management anticipates 2020 project sales to total about 0.9GW, encouraging segmental EBIT at comparable levels to FY19.<\/p>\n\n\n\n

Transaction accelerates renewables expansion<\/h2>\n\n\n\n

The International Energy Agency <\/a>calculates that for the energy industry globally to reach net-zero emissions by 2050, new solar PV installations will need to grow from 110 GW annually to almost 500GW and power sector investment to triple from $760bn to $2,200bn. However, participating in this expansion is capital intensive, with BayWa investing an average of $1.5bn in the segment during FY19, 33% of the group’s total. Management anticipates the EIP investment will enable BayWa r.e.to scale up the project business to 3GW of project sales from 2025 onwards.<\/p>\n\n\n\n

The capital will also enable BayWa r.e. to develop its independent power provider activity, creating a recurring revenue stream from contracts to provide electricity from 2022 onwards. Management projections show that this activity will represent 23 percent of segmental revenues by 2023 and earnings of 56%, Contributing to a segmental EBIT of over $170m. By 2028, management intends to be selling approximately 3GW power per year from its power generation resources.<\/p>\n\n\n\n

Market Reaction<\/h2>\n\n\n\n

Public market reaction was positive, up 8%, with continued lift in the past week:<\/p>\n\n\n\n

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Deal Announcement for BayWa<\/figcaption><\/figure><\/div>\n