Repsol adds EIP and Crédit Agricole Assurances as partners to grow renewables business

June 10, 2022
Crédit Agricole Assurances and Energy Infrastructure Partners (EIP) have signed an agreement to acquire 25% of Repsol Renewables for €905 million.

Offshore staff

MADRID, Spain  Repsol's board of directors approved the sale of a 25% stake in Repsol Renewables to the consortium formed by the French insurance company Crédit Agricole Assurances and Switzerland-based Energy Infrastructure Partner (EIP) for €905 million on June 9, according to a Repsol news release.

The transaction values Repsol's renewable business at €4.383 billion, including debt and minority holdings.

Repsol's renewable business was created three years ago. The minority stake sale has generated great interest among the international investment community, with top-tier entities bidding during the various phases of this process, the release stated.

The incorporation of Crédit Agricole Assurances and EIP as partners includes an investment commitment that reinforces Repsol Renewables' growth in line with the objectives of its 2021-2025 Strategic Plan to reach 6 GW of installed capacity in 2025 and includes entering new markets and incorporating complementary technologies like offshore wind.

"Our target is to reach an installed capacity of 6 GW in 2025 and 20 GW in 2030," Repsol CEO Josu Jon Imaz said. 

The transaction, effective from Jan. 1, 2022, is expected to close before year-end, subject to the approvals of regulatory authorities. Under the terms of the shareholder agreement, Repsol will continue to control the renewables business. As a result, Repsol Renewables and its affiliates will continue to be consolidated within the accounts of Grupo Repsol. In accordance with accounting norms, the transaction will have no effect on the Group’s earnings.  

Renewable projects and growth

At year-end 2021, Repsol increased its 2030 installed capacity targets by 60% to 20 GW. By 2025, installed capacity will increase to 6 GW. The company has a portfolio of more than 1.6 GW of installed renewable capacity and is present in Spain, the U.S. and Chile, and is participating in the WindFloat offshore wind project in Portugal.

Among its most significant operational assets in Spain are the Delta I wind farm in Aragon, with 335 MW, and the Valdesolar photovoltaic plant (Valdecaballeros, Badajoz) with a total installed capacity of 264 MW. The Delta I project is 49% owned by investment group Pontegadea. Valdesolar is 49% owned by The Renewables Infrastructure Group. Both transactions, involving the entry of a minority shareholder, carried out in November 2021 and March 2022 respectively, have consolidated an asset rotation model that reinforces its double-digit profitability.

Also operational is the Kappa photovoltaic complex with a capacity of 126.6 MW, located in Manzanares (Ciudad Real). With regard to the Delta II wind power project, work on which began in 2021, two of its 26 wind farms are already in operation. Located in the three provinces of Aragon (Zaragoza, Huesca and Teruel), this facility will have a capacity of 860 MW when completed, making it the company's largest renewable project to date.

The company has other projects under development in Spain totaling more than 700 MW: the Pi wind farm located between Palencia and Valladolid, the Sigma photovoltaic project in Jerez de la Frontera and two photovoltaic projects in the provinces of Alicante and Guadalajara are undergoing administrative approval processes.

Repsol also has a material hydroelectric portfolio in northern Spain (Aguayo-Aguilar, Navia and Picos), with an installed capacity of 693 MW and a project to significantly expand the Aguayo II pumped storage facility when regulatory conditions allow.

In Chile, its alliance with the Ibereolica Renovables Group gives the company access to a portfolio of projects in operation, construction and development of more than 1.6 GW through 2025 and the possibility of exceeding 2.6 GW in 2030. This joint venture has completed the construction of the Cabo Leones III wind farm, with a capacity of 188 MW, and is building the Atacama project with a total installed capacity of up to 180 MW.

In the U.S., Repsol is producing electricity at Jicarilla 2 in New Mexico, its first solar plant in the country with a total installed capacity of 62.5 MW. At the same location, it is developing another solar plant, Jicarilla 1, with an installed capacity of 62.5 MW and 20 MW of battery storage.

With these projects Repsol has materialized the agreement it signed in May 2021 to acquire 40% of Hecate Energy, whose pipeline of projects totals more than 40 GW. Repsol also will invest in a 600-MW solar project in Texas and expects to reach 2.1 GW of installed capacity in the U.S. by 2025 and 7.8 GW by 2030.