Victor Chi
Updated on: October 11, 2024 6:07 am GMT
ENGIE North America has formed a significant partnership with Ares Management, establishing a 2.7 gigawatt (GW) portfolio of renewable energy and storage assets in the United States. This deal marks ENGIE’s largest operating portfolio sell-down in the country and ranks among the most substantial sales in the renewable sector, underscoring the growing trend towards sustainable energy solutions.
Details of the Partnership
The agreement was finalized on September 12, 2024, and involves 15 operational projects distributed across various regions including ERCOT (Electric Reliability Council of Texas), MISO (Midcontinent Independent System Operator), PJM (PJM Interconnection), and SPP (Southwest Power Pool). Within this portfolio, solar accounts for 53%, wind for 25%, and battery storage makes up 22%, highlighting ENGIE’s diverse approach to renewable energy production.
ENGIE will maintain a controlling stake in the portfolio and is set to continue managing the operations, ensuring ongoing commitment to these renewable assets. Dave Carroll, Chief Renewables Officer at ENGIE North America, expressed enthusiasm about the partnership, stating, “We are delighted that ENGIE and Ares will be partners in such a large-scale renewables and co-located storage portfolio to further accelerate the energy transition towards a net-zero future.”
Strategic Implications for ENGIE
This collaboration not only demonstrates ENGIE’s operational capabilities in the renewable sector but also supports its broader strategy to recycle capital while partnering with leading firms in the infrastructure investment landscape. ENGIE has established a significant footprint in North America, with over 8 GW of renewable production either in operation or under construction. The company aims to expand this figure by adding 4 GW annually through 2025, with North America playing a pivotal role in attaining this goal.
Carroll highlighted the significance of the deal by pointing to ENGIE’s proven track record in developing and managing renewable resources. By engaging with Ares, a respected player in infrastructure investments, ENGIE can further its mission of facilitating the transition to a low-carbon economy.
Ares Management’s Role
Ares Management Corporation, with a global asset management platform exceeding $447 billion, is recognized for its alternative investment solutions across various sectors, including infrastructure. Steve Porto, a Partner in Ares’ Infrastructure Opportunities strategy, remarked on the importance of partnering with ENGIE. He stated, “This partnership provides diversification across proven technology and geography at scale alongside a strong operator.”
This collaboration enables Ares to leverage its investment capabilities to support ENGIE’s objectives, facilitating the necessary capital flow for the continued development of renewable energy assets. The partnership is poised to enhance Ares’ presence in the growing clean energy sector and contribute positively to climate infrastructure expansion.
The Renewable Energy Landscape
As the global push towards renewable energy intensifies, partnerships like ENGIE and Ares signal a shift towards more sustainable development practices. The renewable energy sector is crucial for addressing climate change, and such strategic collaborations play a significant role in advancing energy transition initiatives.
With increasing regulatory pressure and societal demand for cleaner energy sources, ENGIE’s commitment and Ares’ investment philosophy align well with the current market dynamics. This partnership reflects a broader trend wherein established energy firms and financial institutions unite to tackle the complexities of transitioning to a sustainable energy future.
About ENGIE North America
ENGIE North America operates as a regional hub for ENGIE, which is a global leader in low-carbon energy and services. The Houston-based company focuses on supporting clients in achieving their energy efficiency and sustainability goals. ENGIE’s business models incorporate multiple aspects of energy production, including gas and renewable energy (solar, wind, and storage).
Engie aims to provide solutions that are economically viable while simultaneously creating a positive impact on both the environment and society. Their commitment to building a carbon-neutral future is reflected in their ongoing projects and partnerships in the United States and Canada.
About Ares Management Corporation
Ares Management Corporation specializes in alternative investments, offering a wide range of financial solutions that span various asset classes. They focus on delivering flexible capital to foster business growth and community value. With a global workforce exceeding 2,950 employees, Ares operates in multiple regions, including North America, Europe, and Asia Pacific.
The firm’s diverse investment strategies facilitate consistent returns across different market cycles, positioning them as a key player in various sectors, including infrastructure. Ares’ partnership with ENGIE enhances its portfolio, aligning with the ongoing global shift towards renewable energy and infrastructure development.
ENGIE and Ares Management are teaming up to create a big renewable energy project. This partnership is an important step in making sure we can meet our energy needs in a way that is good for the planet. By combining their skills and resources, both companies are helping to make renewable energy more available as the U.S. moves toward cleaner energy sources.
