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STRATEGY

TEAM

CASE STUDIES

PORTFOLIO

CAREERS

NEWS

CONTACT

INVESTORS

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GENERAL

GENERAL

GENERAL

Building Renewable US Hydro Business

Over 2007-14 acquired multiple hydroelectric portfolios, primarily in the United States

Please note this investment was executed during prior employment of a Reinova Co-Founder

Transaction Overview

Transaction Overview

Identified hydroelectric assets as long-life, lowest marginal cost of power generation; executed a muti-year strategy led rollup to assemble and integrate scale portfolio
Approximately 1.5 GW across ~11 transactions

Transaction Overview

Identified hydroelectric assets as long-life, lowest marginal cost of power generation; executed a muti-year strategy led rollup to assemble and integrate scale portfolio
Approximately 1.5 GW across ~11 transactions

Investment Thesis

Investment Thesis

Electricity markets in early stages of deregulation – new capacity needs driving rush to build gas-fired generation
Developed contrarian thesis that hydroelectric assets were mispriced given their low on the cost-curve market position and ability to generate cashflow in all market cycles
Used a proactive, origination led strategy to directly transact with owners of hydroelectric assets and aggregate multiple portfolios to build operating platform scale
Worked with rating agencies to develop unique investment-grade rated financing structure in US private placement market to enable purchase of merchant hydroelectric assets

Invest for Value

Invest for Value

Multiple assets acquired via variety of transaction styles – principally directly negotiated

Required underwriting new regional power markets

Acquired hydro from industrial owners

Industrials often needed to reallocate capital to core business or had “stranded” assets when industrial operations were relocated
Acquired 102 MW Hawks Nest Hydro from silicon-metal industrial company
Acquired 378 MW Smoky Mountain Hydro portfolio in Tennessee from Alcan

Sponsor and Utility Sales - Safe Harbor Hydro

Acquired a 417 MW hydro asset in multiple transactions starting with a minority interest acquisition with restructured governance

Distress for control - White Pine Hydro

In 2013 acquired 360 MW hydro portfolio in “distress for control” transaction – see sperate case study

Value Creation

Value Creation

Multiple assets acquired that had a variety of value creation levers
Asset level enhancements (examples)
1. Turbine upgrades / repowering
2. Cost management
3. Major maintenance capex management
Revenue Enhancements
1. Optimization of water use in higher priced periods
2. Develop eligibility and/or realize multiple revenue streams (capacity, ancillaries, other)
3. Secure transmission rights into new power markets
Regulatory Enhancements
1. License extensions
2. Low impact certifications
3. Environmental (fish passage) upgrades

Building for Exit

Building for Exit

Highly cash generative assets generating significant yield
Re-contracting / higher power prices led to ability to upfinance
Exit of select portfolios

Other Case Studies

Enwave Canada

Enwave was a district energy business in and owned by City of Toronto - $330mm investment

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Wind Energy Transmission Texas

415-mile regulated, high-voltage transmission system in West Texas connected to 2,873 MW of wind and solar farms

Bord Gais Energy

Carve-out of multi-utility to develop ~€700M Irish renewable platform build – investment followed by CEO Role