Italy’s Enel and private equity firm KKR are reportedly among the potential bidders for Cubico Sustainable Investments, a UK-based renewable energy company. Non-binding offers for the company, which Canadian pension funds PSP Investments and Ontario Teachers’ Pension Plan (OTPP) are considering selling, were due last week. The sale could value Cubico at $6 billion or more, including debt.
Bank of America and Canadian Imperial Bank of Commerce are managing the sale process, which has attracted interest from various infrastructure investors and corporate utilities. This interest reflects the ongoing trend of investment in renewable energy assets driven by the global energy transition. However, the landscape is becoming more complex. Renewed interest in fossil fuels, spurred by increased electricity demand from sectors like artificial intelligence and political shifts, is creating new challenges for the renewable energy sector.
Cubico was established in 2015 as a joint venture between PSP Investments, OTPP, and Banco Santander. The Canadian pension funds later acquired full ownership in 2016. The company operates a diverse portfolio of wind, solar, and concentrated solar power projects, along with transmission line technology operations, across Europe, North and South America, and Australia. Its total capacity stands at 2.8 gigawatts (GW).
In 2023, Cubico reported earnings before interest, tax, depreciation, and amortization (EBITDA) of $625 million on revenue of $783 million. This strong financial performance underscores the continued growth and profitability of the renewable energy sector, even amidst evolving market dynamics. The potential acquisition of Cubico represents a significant opportunity for investors seeking to expand their presence in the global renewable energy market. The outcome of the bidding process will likely be influenced by a variety of factors, including the bidders’ strategic goals, financial capabilities, and assessment of Cubico’s long-term growth potential.
The final decision on the sale of Cubico remains pending. The current owners and potential bidders have declined to comment on the ongoing negotiations. The transaction, if completed, will be a significant development in the renewable energy sector and could signal further consolidation in the industry. It will also be a key indicator of investor confidence in the long-term prospects of renewable energy, particularly in the context of evolving energy demands and geopolitical factors.
