IMCO and PSP Investments join forces to acquire German renewables firm
Canadian pension funds the Public Sector Pension Investment Board (PSP Investments) and the Investment Management Corporation of Ontario (IMCO) have signed an agreement to acquire German renewables firm NeXtWind.
The acquisition of NeXtWind will be in partnership with private investment firm Sandbrook. As a renewables firm, NeXtWind specialises in acquiring and repowering onshore wind farms, from a syndicate led by Crestline Investors, an investment management firm head-quartered in Fort Worth, Texas.
As part of the transaction, the consortium will commit up to $750m of equity capital to NeXtWind to acquire its existing portfolio of operating wind assets, and to fund future growth.
Patrick Samson, global head of real assets investments at PSP, said: “Onshore wind repowering represents an important lever in enabling Germany’s energy transition. We are proud to join forces with NeXtWind’s highly experienced team to deliver on their repowering strategy and to reinforce our commitment to using capital and influence to support the transition to global net-zero emissions by 2050.”
Germany is the largest onshore wind market in Europe, with 58GW of installed capacity at the end of 2022. Approximately 30% of this capacity (13,000 turbines) has been in service for more than 15 years, representing a large market of older turbines that will need to be refurbished.
Compared to other institutional markets, Canadian pension funds tend to have a higher allocation to alternatives. IMCO, which manages C$73bn has 17% of its portfolio invested in real estate, 12% in infrastructure and 8% in private equity. Similarly, PSP Invest, which manages C$243.7bn invests more than 15% of its portfolio in private equity, 13% in real estate and 12% in infrastructure.
IMCO’s climate targets for 2030 include a 50% reduction in portfolio emissions intensity by 2030, as measured against IMCO’s 2019 baseline, and investments in climate solutions totalling 20% of the portfolio by 2030. PSP Invest has pledged to invest at least C$7.5bn in transition assets.
