The sovereign fund of Singapore bets on Spanish renewables. GIC has signed a loan for 300 million euros to Forestalia, according to sources familiar with the operation. The objective is for the Spanish company to finance its growth plan after having emerged as the great winner of the renewable energy auctions of 2016 and 2017.
The sovereign fund of Singapore is an old acquaintance of the Spanish market. It has several assets in the real estate market, among others a stake in GMP, the Socimi of the Montoro family. It also owns 9.2% of Cellnex and, together with the US private equity firm Hellman & Friedman, controls almost 45% of Allfunds. Now it has set its sights on the Spanish renewable sector, which has a new actor.
Now GIC has reached an investment agreement with Forestalia. The sovereign fund has agreed to inject 300 million euros through the aforementioned loan. The loan has a seven-year maturity and offers several opportunities for GIC to convert debt into equity. Ahorro Corporación has acted as adviser to the operation, structuring agent and broker for the investor.
Forestalia's capital will remain 100% in the hands of Fernando Samper, who founded the firm in 2011. It has renewable energy projects for six gigawatts (6,000 megawatts), of which two are already in operation, both wind and solar. and biomass. And it was the big winner of the renewable energy auctions organized in 2016 and 2017: it was made in total with more than 1,000 megawatts thanks to very aggressive prices.
It represents the irruption of GIC in the Spanish sector of green energies
Since then, the Aragonese company has sought financial partners and has carried out operations to finance the development of the plants it was awarded. For example, in 2020 it closed the sale to Repsol of 26 wind farms, with 860 megawatts of capacity. A year earlier, it had also transferred another 335 megawatts to the oil company. And in January it agreed to sell another 1,000 exclusively to Bruc. It has also signed agreements with Mirova, Engie, General Electric and CIP.
The Forestalia group closed 2019, the last one with audited accounts presented to the Mercantile Registry, with a profit of 94 million, compared to losses of 2.5 million the previous year. Revenue multiplied by three in that exercise, up to 71.1 million. In addition, he pocketed 111 million for extraordinary for the sale of investees.
In addition to the loan signed with GIC, Forestalia had a debt with credit institutions of 265.73 million at the end of 2019. To this amount will be added the 300 million granted by the sovereign fund of Singapore.
The company earned 94 million last year from the sale of investees
The largest amount corresponds to a loan of 140 million, expandable up to 200, with the EIG fund, specialized in financing renewable energies that has participated in operations with Abengoa and Opdenergy. This loan expires in 2023. And it maintains other credits with the Ministry of Industry, for 9 million, and with the regional public energy entity of Castilla y León, for 42 million.
a key moment
The GIC operation comes at a delicate moment for the renewable sector in Spain. Less than two months ago, two companies, Capital Energy and Opedenergy, were forced to cancel their plans to go public. The reason was that they did not find enough demand from the markets to jump into the market at the desired price. Ecoener, which did manage to debut, did so with a 12.5% loss in its first trading session.
The feeling that beat in the market is that investment in green energy in Spain was a bubble about to burst. The companies that went to the market did so with more projects than megawatts underway. Investors were not willing to pay as much as they asked for projects that were only on paper.
However, pension, venture capital and infrastructure funds are still willing to take out their portfolios to bet on renewables, but always far from the trading floor. Recently, I Squared has acquired T Solar, Notharland has acquired Helia and CDPQ has acquired the latest portfolio of Q-Energy.
