Copenhagen Infrastructure Partners (CIP), the world’s largest dedicated fund manager within greenfield renewable energy infrastructure investments, has entered into an agreement with Vestas, whereby Vestas will acquire a 25% minority stake in CIP. Transaction proceeds will be committed as re-investments into CIP and new funds over the years to come to accelerate growth and innovation and increase co-investments.
“The transaction marks a major milestone for CIP and our investors. It strengthens CIP’s position as a market pioneer and global leader within renewable energy investments and complements our industrial know-how with an even stronger capacity to innovate, lead, and enhance the deployment of institutional capital into investments in the global energy transition towards a net zero carbon economy”, says Jakob Baruël Poulsen, Managing Partner of CIP.
“As a leader in sustainable energy solutions, Vestas is determined to play a role in driving the global transition towards a decarbonised energy system. To do so, we must increase our involvement across the renewable value chain and benefit from value creation across technology providers, developers and owners. Our investment in CIP enables us to achieve these goals. I am therefore very excited to begin this new journey with a global leader like CIP,” says Henrik Andersen, CEO of Vestas.
Over the past decade, the renewable energy market has seen tremendous growth driven by major technological advancements reducing the cost of green energy. In the coming decades, growth in renewable power generation will accelerate as major economies put the climate challenge on top of the agenda with ambitious targets for reduction of carbon emissions.
“The first 8 years of CIP have been successful and the next decade will likely be even more exciting as growth in renewable power generation accelerates, driven by commitments to ambitious renewable targets in major economies. Offshore wind will grow to become an important part of the energy mix across continents driven by technological progress such as larger turbines and floating foundations. The transaction with Vestas enables CIP to remain in front and invest significantly across the globe”, says Torsten Lodberg Smed, Senior Partner in CIP and responsible for CIP’s offshore wind activities.
CIP will launch a new fund to invest in Power-to-X project
At the same time, the scope and size of the renewable energy market will increase driven by the vast opportunities to decarbonise high energy demand sectors currently supplied by fossil fuels. CIP will use part of the transaction proceeds to create and co-invest into a new Energy Transition Fund, which will be launched in the first half of 2021. The Energy Transition Fund will invest in technologies such as Power-to-X, which will be instrumental for the decarbonisation of large-scale markets in fuel and feedstock.
“In order to reach the critical point of net-zero emissions, the growth within electrification needs to be complemented by decarbonisation of fuels to transportation, feedstock to industrial sectors, and production of green ammonia as fertilizer for agriculture. Vestas and CIP share this strategic perspective alongside a joint ambition to continue to develop CIP into the leading platform for institutional investors seeking to deploy capital directly into some of the largest and leading edge energy projects across the world”, says Christina Grumstrup Sørensen, Senior Partner in CIP leading the asset management activities.
”Technologies such as Power-to-X have the potential to significantly decarbonise the economy over the coming decades and provide attractive opportunities for investors with market insight and industrial competence. CIP’s new Energy Transition Fund provides investors with the opportunity to participate directly in the next phase of the energy transition. PensionDanmark was a first mover into renewable infrastructure investments including off-shore wind more than 10 years ago, and we are excited about the opportunity to continue investing with CIP at the forefront of the energy market developments”, says Torben Möger Pedersen, CEO of PensionDanmark and chairman of the Danish Government’s Climate Partnership on Finance.
PensionDanmark is the founding investor in the CIP funds, the sole investor in the first fund in 2012 and the largest anchor investor in all funds managed by CIP.
CIP to continue its growth
The journey for CIP to become a global market leader within investments in greenfield renewable energy infrastructure has been fast paced. In 2012, CIP established the world’s first dedicated fund for utility scale greenfield renewable projects with a commitment of EUR 1bn in cooperation with PensionDanmark. Just eight years later, CIP now manages approximately EUR 14bn of investor commitments from close to 100 of the world’s leading investors comprising pension and insurance companies, and large family offices. CIP has an ambition to continue its rapid growth and increase its renewable investments toward EUR 75-100bn by 2030.
As a minority owner, Vestas will be represented at the CIP Holding board and will, together with the CIP senior partners, focus on the strategic direction of CIP.
“I am looking forward to Vestas being part of the board of CIP. Vestas has a strong track record and has, for many years, been a market leader in wind energy solutions. CIP and Vestas have a shared vision for the renewable energy market providing common ground for the strategic direction of CIP, in which CIP will continue to create attractive investment products for institutional investors globally with a significant contribution to the global climate agenda”, says Christian Skakkebæk, Senior Partner in CIP and member of the board of CIP Holding.
The daily management and governance of the CIP-managed funds will continue to be carried out by the CIP Partner Group and investment committee of the individual funds. CIP will not be limited in any way in relation to choosing providers of wind turbines and services and negotiating competitive market terms. The CIP team will continue to be responsible for project origination, project and investment structuring in order to generate the best possible risk / return profile for the investors in the funds.
Vestas will acquire the 25% minority stake in CIP for a total consideration of EUR 500m, hereof EUR 180m as an upfront payment and a EUR 320m potential earn out.
About Copenhagen Infrastructure Partners (CIP)
Copenhagen Infrastructure Partners (CIP) is Danish fund management company focused on renewable energy infrastructure including offshore wind, onshore wind, solar PV, biomass and energy-from-waste, storage, transmission and distribution, and other energy assets. CIP has approximately 130 employees and offices in Copenhagen, New York, London, Hamburg, Utrecht and Tokyo.
CIP manages seven funds with around EUR 14 billion in commitment under management. The funds have made more than 20 investments in large scale energy infrastructure assets totalling almost 8 GW in capacity (including transmission projects) across the US, Canada, the UK, Germany, Spain, and Taiwan. In addition, more than 20 greenfield energy infrastructure projects are in process to reach final investment decision and start of construction within the next 3 years. Investors in the funds include several blue-chip institutional investors from the Nordics, Continental Europe, the UK, Israel, Taiwan, Korea, Australia, and multi-lateral organizations e.g. EIB. The investors in CIP’s funds comprise mainly pension and life companies and large family offices.
CIP was established in 2012 by senior executives from the energy sector in cooperation with PensionDanmark and is today a global leader, market pioneer, and the largest financial sponsor with a dedicated energy infrastructure focus. Vestas is acquiring a 25% stake in the CIP parent companies and will get representation at the CIP Holding board. Fund management activities will continue unchanged and be carried out by CIP.
Vestas is the energy industry’s global partner on sustainable energy solutions. Vestas designs, manufactures, installs, and services wind turbines across the globe, and with more than 122 GW of wind turbines in 82 countries, Vestas has installed more wind power than anyone else. Through industry-leading smart data capabilities and unparalleled more than 108 GW of wind turbines under service, Vestas uses data to interpret, forecast, and exploit wind resources and deliver best-in-class wind power solutions. Together with customers, Vestas’ more than 25,500 employees are bringing the world sustainable energy solutions to power a bright future.
For any further information, please contact:
Kelly Bork, Copenhagen Infrastructure Partners
phone: +45 70 70 51 51