Renewable Energy M&A: Better Energy, Industriens Pension to invest €800mn in developing 1 GW of solar PV projects in Denmark, Sweden, and Poland

The move, which expands the existing partnership between the two companies, involves the installation of 15 solar plants. Industriens Pension and Better Energy will each own 50% of the assets, with Better Energy responsible for the development, construction, operation, and sale of power from the parks. The plants are expected to be operational by the end of 2024.   Enerdatics believes that the company will pursue power purchase agreements (PPAs) with investment-grade corporate and utility off-takers for most of the produced electricity, based on an analysis of its power marketing strategy. The company’s utility partners include Statkraft and Centrica, while its corporate customers include Carlsberg, Telenor, and Arla Foods. Our research indicates that a minority share of the electricity could be sold at wholesale prices on the merchant market as well. 

Better Energy and Industriens Pensions first agreed to collaborate in Dec '20, forming a 50:50 partnership to invest €530mn in the construction of five solar parks in Denmark and Poland with a total capacity of 1 GW. Under the plan, the partners would contribute ~€200mn as equity to fund construction activities, with the balance to come from long-term project financing, typically in the form of mortgage loans. In Apr '22, the companies agreed to expand their partnership to include an additional 300 MW of solar projects in Poland, as part of a wider 1 GW+ development pipeline in the country being matured by Better Energy. The expanded partnership involves a total investment of €670mn, which will be deployed separately to the recently announced €800mn co-funding agreement.

Better Energy is one of Denmark’s leading solar PV developers, with 1 GW of operating capacity spanning 21 projects (16 in Denmark and 5 in Poland). The company also holds a ~11 GW development pipeline, which it plans to double in capacity during the next three years. Since 2019, Better Energy has secured “triple-digit Danish Kroner” investments from Danish pension fund ATP and French private equity investor OMNES.

The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.

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