I Squared Capital, a private equity firm focusing on global infrastructure investments, through its closed managed fund ISQ Global Infrastructure Fund I, has agreed to sell its interests in Chenya Energy under a share purchase agreement with Marubeni Corporation of Japan. The transaction, announced on February 27, represents the largest solar M&A deal in the Asia-Pacific in 2020 and the third largest solar M&A transaction in the region since 2018.
Chenya Energy, a wholly-owned subsidiary of Asia Cube Energy, a pan-Asian renewable portfolio company founded by I Squared Capital in 2017, is a dedicated solar development, construction and operating platform in Taiwan.
As I Squared Capital managing partner Gautam Bhandari points out, Chenya Energy grew from 2.3MW to 344.44MW of solar capacity across multiple technologies, including floating, ground-mounted and rooftop solutions in three years under the stewardship of I Squared Capital.
Chenya Energy is currently building the world’s largest floating solar project with a capacity of 180MW and has grown rapidly to become the largest solar platform in Taiwan. This is I Squared Capital’s third platform realization in emerging markets.
ISQ Global Infrastructure Fund I portfolio has realized approximately US$1.8 billion in equity value from its platforms alone. Other platform realizations include Kendall Green Energy (a cogeneration facility in Cambridge, Massachusetts) to Veolia, and Cube Hydro (one of the largest independent hydroelectric companies in the US) to Ontario Power Generation.
They likewise include Lincoln Clean Energy (a leading onshore wind developer in the US with 800MW) to Ørsted and Amplus Solar (the preeminent provider of rooftop solar systems for the Indian commercial and industrial market with over 344MW) to Petronas.
Following the conclusion of the share purchase agreement, Chenya will become a wholly-owned subsidiary of Marubeni.
By acquiring Chenya and its solar power generating assets, Marubeni will gain expertise in the floating solar power business and continue to enhance its renewable energy development capabilities. Through Chenya, Marubeni plans to expand the floating solar power business in Taiwan as well as in other regions.
Marubeni’s portfolio of IPP (independent power producer) projects assets exceeds 12.5GW in net generation capacity across 19 countries. In Taiwan, Marubeni has previously made investments in Ever Power gas-fired combined power plant project (960MW) and Hsin Tao gas-fired combined cycle power plant project (600MW).
With the addition of Chenya’s solar power generation assets, Marubeni will hold a stake in more than 950MW of power generation assets within Taiwan, making Marubeni one of the largest IPPs in this market.
Credit Suisse acted as exclusive financial adviser to I Squared Capital for the transaction.