Renewable Energy M&A: Qualitas Energy acquires DunoAir’s 1.4 GW German onshore wind development business

published on 13 April 2023
Qualitas Energy acquires DunoAir’s 1.4 GW German onshore wind development business (1)-bjnfs

The acquisition will expand Qualitas’ current onshore wind development pipeline in the country to 2.9 GW. The purchase was financed through the company’s ~$1.65bn Q-Energy Fund V, which held its first close at ~$1.1bn in Nov’22. The acquisition of DunoAir supports Qualitas’ ambition to expand its wind development pipeline in Germany to 6.2 GW by 2025.

Established in 2009, DunoAir primarily develops projects of 10-25 MW capacity, with its pipeline centered around the western region of the country. Post the acquisition, DunoAir will retain its organizational structure and continue to operate under the same brand, while benefiting from increased access to capital from Qualitas for future expansion across the country. 

Enerdatics data suggests that transacted onshore wind capacity increased by 93% y/y in 2022 to 3 GW, amid rising demand for renewable power in Germany as it shifts away from Russian gas. However, this rise trails far behind the increase in M&A activity in the country’s utility-scale solar sector, which witnessed a 7.9X y/y growth in deal volume during the same period, to 17.8 GW. Enerdatics understands that deal activity in the onshore wind space has been impacted by reduced investor appetite for under-development assets, which have traditionally been the primary acquisition targets. The lower M&A activity was attributed primarily to reduced interest by private equity (PE) and PE-backed firms including CEE Equity Partners and Partners Group, largely due to the increasing construction, credit, and PPA risk in the sector. However, utilities with legacy operations in the country have remained active in the M&A space, with Orsted's $700mn acquisition of OSTWIND Group and its 1.6 GW pipeline in Jul’22 being the largest transaction during the year, by capacity. The deal follows Orsted's partnership agreement with steel producer Salzgitter in Jan’22 to procure low-carbon steel for its wind farms in Germany.

Over the short term, Enerdatics believes that deal activity in Germany’s onshore wind space will continue to be challenged by the lack of government action to incentivize investments, amid project cost inflation and volatility in power prices. However, the InvestEU-EIB agreement - signed on Mar'22 - provides ~$21bn in budgetary guarantees to support over $406bn of investments by financial institutions across the continent. The move is aimed at helping to ease the process of securing project financing, which will increase investor appetite for onshore wind development projects. Further, Enerdatics expects more developers to form partnerships with component manufacturers in an effort to curb rising installation costs and reduce uncertainty surrounding shipping delays. 

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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