Renewable Energy M&A: ENGIE, Meridiam acquire renewable energy platform BTE Renewables in South Africa from Actis for $1bn

Deal details: In a collaborative effort, ENGIE and Meridiam will jointly acquire the full ownership stake in BTE Renewables, formerly known as BioTherm Energy. BTE Renewables currently operates six projects with a combined generating capacity of ~500 MW. The power plants are located in South Africa (five projects) and Kenya (one project). Additionally, the company has an extensive development pipeline exceeding 5 GW across South Africa and Kenya. Under the agreement, ENGIE will assume ownership of the South African portfolio and its accompanying team, thereby acquiring a significant majority stake in the company. Meridiam will take over the remaining portion of the business, encompassing the Kenyan portfolio and team.

Deal rationale: The move aligns with Actis' strategy in the continent, which is focussed on creating value by acquiring early-stage development platforms, developing the assets, and ultimately exiting within a 4-5 year timeframe, at attractive multiples. This transaction also follows Actis' recent successful exit from Lekela Power in March 2023. Actis intends to reinvest the proceeds from these exits back into the continent, as part of its plans to invest up to $300mn annually in renewable energy and other technologies across Africa. These investments will be in addition to the ~$2bn that Actis has already invested in the continent over the past two decades.

For ENGIE, the acquisition is a strategic move aimed at expanding its renewable energy portfolio in South Africa, aligning with the company's objective to achieve an operational portfolio of ~1.1 GW by 2025. Currently, ENGIE’s asset base in South Africa comprises ~315 MW of generation capacity, supplemented by ~500 MW of projects under development. Additionally, the acquisition presents an opportunity for Meridiam to double its existing operational capacity in Kenya, reaching ~500 MW. Meridiam also seeks to augment its investments in the continent, building upon the substantial ~$5.4 billion that it has already committed to projects in Africa.

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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