One of the world's biggest clean-energy investors is buying a pair of U.S. renewable developers for $1.5 billion in bets that add to the money flooding into projects despite the market volatility this year.
Brookfield Asset Management Inc.'s renewable power unit is acquiring wind and solar firm Scout Clean Energy LLC for $1 billion. After originally saying they would pay $530 million, it is buying Standard Solar Inc. for $540 million, company officials said. Brookfield said it could invest more than $500 million more in the two companies to help them grow faster.
Large investors like Brookfield are investing money in clean-energy firms, betting that strong demand will support renewable developers through a period of rising interest rates and economic uncertainty.
The money for the deals comes from a $15 billion Brookfield fund that is co-managed by Mark Carney - the former head of central banks in the U.K. and Canada and the UN point person on climate finance - and Connor Teskey, head of the firm's renewables unit. The megafund and other funds backed by TPG Inc., Blackstone Inc. and others are betting heavily on clean-energy projects.
Brookfield agreed to both deals before the long-term renewable and battery-storage tax credits that are part of the health care, climate and tax act became law. Jehangir Vevaina, a managing partner in Brookfield's renewable power and transition group, said in an interview that it now has more confidence in putting additional money into projects for both companies.
BACKUP, CAN It is going to supercharge our development, he said.
Specific terms of the deals weren't disclosed. Scout Clean Energy and Standard Solar will operate independently within Brookfield's portfolio.
Scout operates large wind and solar projects across the country, including California, Texas and Illinois. Brookfield is buying the company from another clean-energy investor, Quinbrook Infrastructure Partners, which acquired Scout in 2017.
Scout could get tax credits for hydrogen produced using renewable power that are part of the new law because hydrogen producers will need large amounts of renewables. The company could expand into clean-hydrogen production using its own clean power, according to Vevaina.
Standard Solar specializes in on-site projects for businesses and community installations that allow buyers to purchase clean power from centrally owned arrays in states including New York. The company was founded in 2004 in Rockville, Maryland and is currently owned by Quebec-based energy firm nergir LP.
Brookfield's U.S. renewables portfolio includes wind, solar and hydropower projects in 34 states.
The manager of roughly $750 billion across units, including real estate and infrastructure, is expected to list a quarter of its asset-management business by the end of the year.