TNB completes acquisition of major solar power portfolio Vortex Solar in Britain

Fri May 12, 2017 - 7:42am GMT+0000
TNB completes acquisition of major solar power portfolio Vortex Solar in Britain

Tenaga Nasional Bhd (TNB), the only electricity utility company in Peninsular Malaysia has recently completed the acquisition of a 50 percent interest in one of Britain’s largest portfolio of operating solar power assets, with a combined capacity of 365 MW.

The acquisition has a total enterprise value of GBP 470 million transaction and is, in fact, TNB’s first investment in the European renewable generation capacity.

The move is said to be part of an ongoing five-year international expansion plan to achieve the company’s main objective of acquiring up to 250 MW of renewable energy capacity by 2020.

According to a filing with Bursa Malaysia on Friday, the deal was conducted between Tenaga Nasional’s wholly-owned subsidiary, TNB International Sdn Bhd (TNBI) and Vortex Solar UK Ltd. which owns a 100 percent interest in Vortex Solar Investment S.a.r.l. portfolio.

Following the deal, TNB will hold a 50 percent shareholding in Vortex, while Beaufort Investments S.a.r.l, the investment manager of Vortex will own a remaining 50 percent interest.

Previously, Vortex Solar UK has signed a Sale and Purchase Agreement in January with a subsidiary of Terraform Power Inc to acquire the solar portfolio which includes 24 solar photovoltaic farms, Britain’s third largest solar power business.

TNB funded the acquisition through a US$750 million sukuk proceeds issued by the company in October last year.

“We are pleased to complete this acquisition, which was a rare opportunity to acquire a sizeable solar power business in Britain and helps us deliver the renewable energy (RE) as part of Tenaga’s international expansion plan more than one year ahead of schedule,” said TNB’s CEO Datuk Seri Ir Azman bin Mohd.

“The assets are an excellent investment which is immediately earnings enhancing, with 80 percent of revenue under long-term, 15-year power purchase agreements and subsidized by Renewable Obligation Certificates for the next 20 years,” he added.

TNB is one of the largest utility companies in Asia, claiming to have a market capitalization of approximately US$18 billion and a total power generation capacity of around 13 GW, predominantly in Malaysia.

As an integrated electricity provider, the company’s core activities are in the generation, transmission, and distribution of electricity. Through its subsidiaries, the electric utility company is also involved in the manufacturing of transformers, provision of professional consultancy services, and others.

With the completion of the acquisition, TNB’s international renewable energy portfolio will have a combined net installed capacity of 252 MW, following acquisitions the company has made last year in power companies located in India and Turkey.

Since its launch in late 2014, Vortex has successfully invested more than €1.3 billion in the European renewables market. The UK solar portfolio joins an existing 457 MW portfolio of operating onshore wind assets operated by EDP Renováveis SA across four Western European countries.

Vortex is currently in the process of refinancing the portfolio’s existing debt facilities, it is planning to sell another 45 percent of the equity share capital in the near future and retaining only a 5 percent stake.