Renewable energy developer Abengoa is close to forming a joint venture with EIG Global Energy Partners to set up and operate a number of renewable energy projects.
Under the plan, the joint venture named Abengoa Projects Warehouse 1 will acquire a number of Greenfield projects that are being developed by Abengoa. The deal is expected to close in the next four to six weeks.
The total investment amount to be managed by APW1 will be more than US$9.2 billion, of which US$2.5 billion will come from equity, and the rest from debt. EIG will hold a 55% stake in the jouint venture, with Abengoa holding the rest.
The asset to be acquired, which also include conventional power plants, are in different South and North American countries including the U.S., Mexico, Brazil and Chile.
APW1 will sign the existing Right of First Offer agreement between Abengoa and Abengoa Yield. Abengoa and APW1 will also sign a new ROFO agreement to allow APW1 to invest in new projects won by Abengoa.
“The objective of APW1 is, at least, to reinvest 100% of the initial equity in a second set of projects in the future, which if achieved will extend the APW1 activity over the next eight years approximately, and will add another $6bn to $7bn of projects value on top of the initial $9.2bn,” Abengoa said in a statement.
Abengoa and EIG have relationship since 2007 when EIG co-invested with Abengoa for the development of an ethanol plant in France.