Developer X-Elio sells to Brookfield extending fund’s position in Australia

Private equity giant Kohlberg Kravis Roberts (KKR) will sell its stake in X-Elio to its current partner Brookfield Renewables, the companies confirmed in a joint statement on March 21.

The investment funds have not disclosed the transaction details, which will see Brookfield go from owning 50% of X-Elio to 100% ownership. A Spanish newspaper, however, last month reported KKR was considering selling its stake, saying a deal would value the company at €2.5 billion ($4 billion).

KKR first invested in X-Elio in 2015, while Brookfield acquired its initial 50% stake in 2019.

X-Elio says by the end of 2023 it is expected to have 3 GW of assets in operation, under construction or ready-to-build across Spain, Australia, the US, Japan, Latin America and Italy. In addition, the company says it has over 10 GW of projects in its advanced near-term pipeline.

In Australia, X-Elio recently completed the 200 MW Blue Grass Solar Farm near Chinchilla in Queensland’s Western Downs region, and is currently seeking approval for its 90 MW Forest Glen solar farm in the Dubbo region of New South Wales (NSW). In March, the company also unveiled plans to build a 300 MW solar farm and battery system near Wagga Wagga in southwest NSW, known as the Maxwell Solar Farm.

At the time, Belinda Fan, X-Elio’s country manager in Australia, said X-Elio has “significant ambition to grow our investments in Australia” after having entered the market here in 2017.

Coming back to the sale, Ignacio Paz-Ares, Brookfield Renewable’s Head of European Renewable Power and Transition Investments, described X-Elio as a business “we know well” following its four years of involvement. “This transaction is very aligned with Brookfield’s strategy as a leading owner, operator and developer of renewables worldwide, driven by the incredible tailwinds for this sector.”

Brookfield in February returned to its takeover bid for Origin Energy, Australia’s second biggest energy generator and retailer, with bid-partner MidOcean Energy, managed by US investment giant EIG Partners. Its revised Origin offer is valued at roughly $18.2 billion (USD 12.5 billion) and has ben endorsed by Origin’s board – though the sale is still subject to review from Australia’s competition regulator.

Given Brookfield’s recent takeover of Victorian network, AusNet Services, this could prove a hurdle.

Brookfield is currently aiming to create the world’s largest fund for renewable investment, the Brookfield Global Transition Fund, which is headed up by Mark Carney, one of the world’s most influential climate change power brokers.