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Masdar to acquire 50% stake in Terra-Gen from Energy Capital Partners

Strategic investment advances Masdar’s ambitious plans in the growing US market

Abu Dhabi Future Energy Company PJSC – Masdar has signed a definitive agreement to acquire a 50 per cent stake in Terra-Gen Power Holdings II, LLC (“Terra-Gen”), one of the largest independent renewable energy power producers in the US, from Energy Capital Partners (ECP).

A leading investor across energy transition, electrification and decarbonisation infrastructure assets, ECP will fully exit its position in Terra-Gen in connection with the transaction. Igneo Infrastructure Partners, a global infrastructure investment manager, will retain its existing 50 per cent stake in the company. Igneo made its initial investment in Terra-Gen in December 2020.

Established in 2007, Terra-Gen is a leading independent provider of end-to-end renewable project development, financing and operating capabilities. Terra-Gen has a proven track record of developing, owning and operating assets across a large and diverse set of renewable technologies in the most attractive markets for renewables and storage in the US. Terra-Gen currently operates approximately 2.4 GW of wind and solar, and 5.1 GWh of energy storage facilities across 32 renewable power sites throughout the US, predominantly in California and Texas. “This transaction will position Terra-Gen to continue building on the significant growth and transformation realized under ECP’s ownership and achieve accelerated long-term success as part of Masdar’s and Igneo’s portfolios,” a statement said.

Masdar’s 18-year history of funding, developing, owning and operating clean energy projects around the world will support Terra-Gen’s ambitions to grow its renewable capacity and portfolio in the US. One of the world’s fastest-growing clean energy companies, UAE-based Masdar first invested in the US energy market in 2019. Its US portfolio of utility scale wind, solar and storage assets has a generating capacity of more than 1.4 GW. The US market will play an important role as Masdar executes its plan to build a global renewable energy portfolio of at least 100 GW capacity by 2030, and this proposed transaction represents another significant milestone towards that goal.

Mohamed Jameel Al Ramahi, chief executive officer of Masdar, said: “Our investment in Terra-Gen’s impressive energy portfolio expands our existing US footprint and reinforces Masdar’s long-term commitment across our US portfolio. This transaction unites one of the largest independent renewable energy producers in the US with Masdar – one of the fastest growing clean energy companies in the world. We look forward to working alongside Igneo as our valued partner to accelerate Terra-Gen’s growth and deliver world-class innovation at utility scale in support of the global energy transition.”

Philip Haddad, president and CEO of Masdar Americas, said: “We’ve been impressed by Terra-Gen’s record, scalable platform of operating assets and realisable project pipeline underpinning its growth trajectory. Upon closing, we look forward to actively partnering with Igneo and working closely with Terra-Gen’s experienced management team to support Terra-Gen’s operations, facilitate its development of new capacity renewable energy projects and expand its presence in and beyond its key markets.”

Jim Pagano, CEO of Terra-Gen, said: “Terra-Gen is committed to developing responsible energy projects that benefit local communities and future generations. We have enjoyed a tremendous partnership with ECP, which allowed us to build a strong and resilient business positioned for long-term growth. As we look to build on our tangible pipeline of projects, we are excited to work with Masdar, a like-minded partner with a track record of commitment to decarbonization and clean energy projects in the US and around the world.”

Terra-Gen was originally acquired by ECP in 2015, and under its ownership, Terra-Gen more than tripled its portfolio of operating renewable assets. Under Igneo and ECP, since 2020, Terra-Gen has added over 1 GW of generating capacity and 5 GWh of storage, expanded its pipeline of wind, solar and battery storage projects and enjoyed sustained growth.

Schuyler Coppedge, Partner at ECP, said: “It has been a privilege to work with Terra-Gen and its talented team for almost a decade. They have created a strong company by seizing growth opportunities and successfully executing across market cycles. We are proud of Terra-Gen’s achievements during ECP’s ownership and are confident that the company will have another successful chapter with Masdar and Igneo.”

John DiMarco, managing director at Igneo, said: “Igneo is excited to partner with Masdar on Terra-Gen’s next phase of growth. Igneo, Masdar and Terra-Gen share a common long-term vision for the company, and Igneo remains steadfastly committed to the continued buildout of Terra-Gen as a premier independent North American renewable power company.”

The transaction is expected to close by the end of 2024, subject to regulatory and other customary approvals.

Lazard and Guggenheim Securities are serving as financial advisers and Latham & Watkins LLP is serving as legal adviser to Terra-Gen. BMO Capital Markets and JP Morgan are serving as financial advisers and White & Case LLP and Covington & Burling LLP are serving as legal advisers to Masdar. Mayer Brown is serving as legal adviser to Igneo.