Masdar’s Enviromena Power Systems was acquired by Arjun Infrastructure Investment Partners (AIP), the first time a regional renewables company has been purchased signalling a maturing market.
Masdar said that this was part of its strategy to help “catalyse the Abu Dhabi renewable energy sector”.
“This successful acquisition by leading international investors supports the realisation of our overall strategy,” said Mohamed Al Ramahi, chief executive of Masdar.
While the financial transaction was not disclosed, sources said that it was an attractive return in the “double-digits”.
The British investment advisory firm will become the sole shareholder for the Abu Dhabi-based Enviromena, one of the region's largest solar rooftop providers covering 35 rooftops in five countries.
A great shot of one of our #solar projects at a school pic.twitter.com/9dIxHAAqWQ
— Enviromena (@Enviromena) November 8, 2017
AIP helps institutional investors grow and manage infrastructure assets, mainly catering to pension plans.
Sami Khoreibi, chief executive of Enviromena, told The National that AIP was using this investment as a platform to get into the region's growing renewable energy market. This comes at a time when more pension funds are looking to get involved in renewable energy, shifting away from the volatile oil markets.
A report from London’s Green Finance Initiative was released in November urging UK pension funds to consider renewable energy investment abroad. It said that historically, UK pension funds had focused on domestic renewables infrastructure allocation due to the familiarity and low-risk, sterling-denominated market.
“Investments in renewables infrastructure overseas, especially in emerging markets offer strong follow-up potential for most,” the report said.
This acquisition will help Enviromena continue as the same company, but with major expansion plans on the horizon.
“One difference is that we’re going to start deploying major capital,” Mr Khoreibi said.
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The firm has previously been an engineering, procurement and construction (EPC) company, but it’s new five-year strategy will see it evolve into an owner of all its assets targeting the commercial and industrial space.
“We will have the capacity to deploy over 100 megawatts, with a ramp-up period, over the next couple of years in commercial and industrial projects,” he said adding that the top priorities would be in the UAE and Saudi Arabia.
“We will continue to have our EPC division, but we do see that there will be tremendous opportunities in the large scale commercial space,” he said. “We want to be amongst the largest diversified solar players in the region.”
