Engie consortium acquires Portuguese hydroelectric dams from EDP for €2.2bn

The deal is valued at €2.2 billion.

The hydroelectric portfolio has a generation capacity of 1.7 gigawatts (GW) with a weighted average remaining concession term of 45 years, and includes three newly commissioned pump storage units along with three recently repowered run-of-river plants.

Engie will operate and maintain the hydroelectric portfolio and also provide energy management services. Engie has a current global hydro capacity of 20 GW.

A Lisbon-based Cuatrecasas team led by partner Francisco Santos Costa advised the consortium on the acquisition, which is the highest-value M&A operation announced in Portugal during 2019. The consortium was also advised by J.P. Morgan and Bredin Prat.

BNP Paribas served as financial advisor – while BDGS served as legal advisor – to Crédit Agricole Assurances. Mirova’s legal counsel was CLP-Cliperton.

An Engie statement said the “acquisition of the hydroelectric portfolio is instrumental to the deployment of Engie’s zero-carbon strategy, bringing flexible renewable capacity which complements Engie’s existing Iberian portfolio of onshore wind (1.1 GW) and solar (50 megawatt) power, most of which is already operated in partnership with Mirova".

Engie owns 40 per cent of the consortium, while Crédit Agricole Assurances and Mirova, through managed funds, own 35 per cent and 25 per cent respectively. A net debt impact of around €650 million is anticipated for Engie, which reported turnover of €60.6 billion in 2018. The transaction is expected to close during the second half of 2020.

Isabelle Kocher (pictured), CEO of Engie, said: “Our increased focus on providing clients with 100 per cent renewable power tailored to their needs will enable Engie to be the leader of the zero carbon transition. This transaction accelerates the implementation of Engie’s strategy. Our target to add 9 GW of renewables over the period 2019 – 2021 is confirmed and this acquisition comes on top of it.”

Frédéric Thomas, CEO of Crédit Agricole Assurances, said: "Engie and Mirova are partners of choice, with significant experience in hydro projects. Thanks to this new partnership in Portugal, Crédit Agricole Assurances is consolidating its presence in the energy transition in Europe, a sector in which it is the leading investor in France.” Crédit Agricole Assurances’ revenues totaled €33.5 billion in 2018.

Mirova will invest via its fund Mirova Eurofideme 4, which is dedicated to the European energy transition and a dedicated co-investment fund created for the purpose of this transaction. “This investment represents a landmark opportunity for Mirova and Crédit Agricole Assurances to acquire a large portfolio of hydro in Portugal in partnership with Engie, and leverage on their unique expertise in managing and optimizing such specific assets, which will ultimately deliver value to our investors.” said Raphael Lance, head of energy transition funds at Mirova.

A Morais Leitão team led by partner Ricardo Andrade Amaro advised EDP on the deal. The team also included managing associate Diana Ribeiro Duarte, associate Helder M. Mourato, associate Joana Alves de Abreu, partner Miguel Nogueira de Brito, managing associate Ana Robin de Andrade, consultant Diana Ettner and managing associate Pedro Gouveia e Melo.