Abu Dhabi battles Apollo for Endesa alliance after its Naturgy takeover bid fails

North American background Apollo and the Emirates Masdar were finalists of the so-called Project Ra 1who launched Endesa to find ally to develop giant renewables portfolio in Spain. Ra 1 is the first of two gthe extensive partner search processes initiated by Endesa several months ago under what is known in financial jargon as the partnership or control.

This alliance format, very common in the energy sector, allows a company to include one or more groups as minority allies in the development of projects. This guarantees the energy company will receive resources for the development of these projects – increasingly capital intensive, especially if it is renewable- without loss of control.

Ideal candidates are investment funds with a medium- to long-term perspective, allowing you to do something in exchange for a guaranteed income.

With Project Ra 1, Endesa seeks partner with 49% share in renewable photovoltaic portfolio. -hence the name Ra, the Egyptian god who personifies the Sun.

Millionaire’s Operation

The portfolio consists of 1200 photovoltaic megawatts are operational or about to be commissioned at a cost of 2400 million.

By transferring 49%, Endesa will receive 1.200 million in financial resources.It would be one of the largest renewable energy deals in Spain in the last two years, concluded by major energy companies.

Another of the great movements was accomplished Masdar with Iberdrola, Endesa’s main competitor in Spain. At the end of 2023 Masdar has become Iberdrola’s biggest ally in renewable energy outside Spain, where the Spanish group already has a partnership with Norway.

Endesa’s intention, as explained by sources in the energy sector, is complete operation of the Ra 1 project by the end of the monthEndesa sources are not commenting.

The technical work has already been completed. Some issues still need to be clarified, and the Endesa board will decide the winner. The final decision may be made at the last council before the August holidays.

call to the council

Endesa is due to convene its board of directors in the last week of July to approve the reports for the first semesterwhich are scheduled to be presented on July 24.

Apollo and Masdar became finalists after a long and intimate process that also involved Brookfield, BlackRock, Schroders (Greencoat), AIP and the oil company PTTEP.Both Apollo and Masdar have reasons to be actively involved in the Endesa process. Apollo has just lost its battle to acquire the Applus group in Spain against funds I Squared and TDR.. He needs success to motivate him. On the other hand, the Arab group Taka, Masdar’s first shareholder, must avenge the fiasco of the failed takeover of Naturgy. whose negotiations finally broke down in June after two months.

PPA, key

Beyond price, the key to the bids – and who will be right, who will tip the scales in favor of one finalist or another – is offering long-term power supply contracts or PPAsabbreviation in English (Power Purchase Agreement).

Endesa is one of Spain’s largest electricity traders, along with Iberdrola. It not only wants to transmit its renewable megawatts at a good price. It also wants toThese green facilities provide you with energy at a good price to serve your customers.. The size, duration and price of these supply contracts, or PPAis important for the decision-making of the Endesa board of directors. These PPAs will also serve support the new partner as a long-term ally.

In addition to the Ra 1 project, Endesa is keeping open Project Ra 2consisting of a portfolio 2000 megawatts, also photovoltaic, in advanced stages of development but not as large as the Ra 1 project.

Therefore, the rating is lower, environment 1200 million euros.