{:en} Offshore wind at scale. That was the draw when CPP Investments bought its 24.5% stake in Hohe See and Albatros in 2018. Located about 100 km off the coast of Germany’s North Sea, the wind farms were still under construction at the time. But by early 2020, development was complete and they were pushing some 2.5 million-megawatt hours of electricity into the grid—enough to power 700,000 households per year. Then the world changed. The war in Ukraine laid bare the European Union’s heavy dependence on Russian energy—the superpower supplied 45% of total EU gas imports in 2021—prompting member states to re-evaluate their energy supply chains. As forest fires and other extreme weather events grew more frequent, regulators began to place a more urgent focus on decarbonization. Notably, Washington’s landmark Inflation Reduction Act, containing generous subsidies for clean energy industries, was signed. And Europe soon answered with its own Green Deal Industrial plan. In just five years, the universe of investors for renewable energy widened dramatically—and for CPP Investments, the opportunity to crystalize returns through an exit became clear. “The appetite for renewable energy assets certainly increased given greater urgency on both energy transition and energy security,” said Barry Liang, a senior associate on the deal. Ultimately a buyer was found close to home. In Canada’s Enbridge Inc. Already a joint venture partner with 24.9% of the assets (alongside German utility and majority owner EnBW with 51%)—Enbridge purchased CPP Investments’ stake in 2023. And CPP Investments netted $374 million in net proceeds after costs, delivering returns well above original expectations. Alongside growing demand, Liang credits the strong return to three key points: investing early in the renewables development cycle; a lower than budgeted construction capital expenditure; and a favourable debt raise earlier on. The transaction demonstrates that investing in the long term doesn’t always mean holding an asset long-term. But in another sense, it’s good example of how long-term thinking continues to pay off. Having identified decarbonization and renewable energy as a long-term trend, CPP Investments established an early footprint in the space. Further growth will be financed by a variety of means including partnerships, securing additional financing at the project level and selling down de-risked assets. Thanks for subscribing to CPP Investments Sign up for our latest news, insights, reports and other information about CPP Investments Email address * Please enter valid email id Job title Select Job Title Associate Analyst Consultant advisor Manager/supervisor Government official/regulator General manager/director Board director Chairman/board member VP/SVP/EVP President Partner/Owner/Entrepreneur Parent/guardian C-level other Chief Human Resources Officer Chief Marketing Officer Chief Financial Officer Chief Sustainability Officer Chief Digital Officer Chief Technology Officer Chief Operating Officer Educator/professor Student Editor/reporter Other Organization How did you hear about CPP Investments? 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Next Subscribe Thanks for subscribing to CPP Investments Sign up for our latest news, insights, reports and other information about CPP Investments Email address * Please enter valid email id Job title Select Job Title Associate Analyst Consultant advisor Manager/supervisor Government official/regulator General manager/director Board director Chairman/board member VP/SVP/EVP President Partner/Owner/Entrepreneur Parent/guardian C-level other Chief Human Resources Officer Chief Marketing Officer Chief Financial Officer Chief Sustainability Officer Chief Digital Officer Chief Technology Officer Chief Operating Officer Educator/professor Student Editor/reporter Other Organization How did you hear about CPP Investments? 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ShareTweetShare Five Minutes with Michel Leduc Michel Leduc, Global Head of Public Affairs and Communications, explores evolving industrial policy, concentration risks, and why investors Video January 31, 2024 “Challenge your beliefs”: Investing in times of geopolitical turbulence Over the past several years, Ed Cass has seen first-hand how labour issues, political tensions and technological change have impacted asset Article January 31, 2024 Who will win the global AI race? Artificial Intelligence (AI) has the potential to revolutionize the way the global economy works and how many businesses generate profits. Article January 31, 2024 {:}{:fr} De l’éolien en mer à grande échelle. C’est ce qui était prévu lorsque Investissements RPC a acquis une participation de 24,5 % dans Hohe See et Albatros en 2018. Les deux parcs éoliens, situés à environ 100 km au large des côtes allemandes de la mer du Nord, étaient encore en construction à ce moment-là. Mais au début de 2020, les travaux préparatoires étaient terminés et les sites injectaient quelque 2,5 millions de mégawattheures d’électricité dans le réseau, soit suffisamment pour alimenter 700 000 foyers. Puis le monde a basculé. La guerre en Ukraine a mis au jour la forte dépendance de l’Union européenne à l’égard de l’énergie russe (la superpuissance a fourni 45 % du total des importations de gaz de l’UE en 2021) ce qui a incité les États membres à réévaluer leurs chaînes d’approvisionnement en énergie. Face à la recrudescence de feux de forêt et autres phénomènes météorologiques extrêmes, les pouvoirs publics ont commencé à accorder une attention plus urgente à la décarbonation. En particulier, Washington a promulgué une loi historique visant la réduction de l’inflation (IRA, Inflation Reduction Act), qui accorde de généreuses subventions aux secteurs de l’énergie propre. L’Europe a alors rapidement répliqué avec son propre plan en faveur de l’industrie : le Pacte vert européen. En seulement cinq ans, l’univers des investisseurs dans les énergies renouvelables s’est considérablement élargi — et pour Investissements RPC, il est devenu évident qu’il était possible de cristalliser les rendements par une sortie. « L’appétit pour les actifs liés à l’énergie renouvelable a certainement augmenté en raison de l’urgence accrue de la transition énergétique et de la sécurité énergétique », a déclaré Barry Liang, adjoint principal sur la transaction. Au final, un acquéreur a été trouvé à proximité : Enbridge Inc. au Canada. Déjà partenaire de la coentreprise à hauteur de 24,9 % des actifs (avec EnBW, une société allemande de services aux collectivités, actionnaire majoritaire avec 51 %), Enbridge a acheté la participation d’Investissements RPC en 2023. Investissements RPC a alors réalisé un produit net de 374 millions de dollars après déduction des frais, ce qui a donné des rendements nettement supérieurs aux attentes initiales. Outre l’accroissement de la demande, Barry Liang attribue ce solide rendement à trois éléments clés : un investissement réalisé tôt dans le cycle de développement des énergies renouvelables; des dépenses d’investissement inférieures au budget de construction; et un accroissement favorable de la dette à un stade plus précoce que prévu. L’opération prouve que l’investissement de long terme ne signifie pas toujours qu’il faut détenir un actif à long terme. Mais dans un autre sens, elle illustre bien que la vision à long terme continue de porter ses fruits. Après avoir identifié une tendance à long terme dans la décarbonation et l’énergie renouvelable, Investissements RPC s’est établi dans le secteur de manière précoce. La poursuite de la croissance sera financée par divers moyens : en faisant appel à des partenaires, en obtenant un financement supplémentaire à l’échelon des projets et en vendant des actifs une fois le risque réduit. Thanks for subscribing to CPP Investments Sign up for our latest news, insights, reports and other information about CPP Investments Email address * Please enter valid email id Job title Select Job Title Associate Analyst Consultant advisor Manager/supervisor Government official/regulator General manager/director Board director Chairman/board member VP/SVP/EVP President Partner/Owner/Entrepreneur Parent/guardian C-level other Chief Human Resources Officer Chief Marketing Officer Chief Financial Officer Chief Sustainability Officer Chief Digital Officer Chief Technology Officer Chief Operating Officer Educator/professor Student Editor/reporter Other Organization How did you hear about CPP Investments? Select Source CPP Investments alumni CPP Investments employee or board member CPP Investments portfolio company Online search (e.g. Google) Social media Other What news would you like to receive? * News and updates from CPP Investments Latest news from the Insights Institute Consent * By checking here, you are subscribing to receive our newsletters and other similar types of insights and reports by email, and permit CPP Investments to use cookies and similar technologies to analyze your interactions with our emails. Unsubscribe at any time by clicking the link in the newsletter’s footer. Visit our Privacy Policy for more information. Questions or concerns? Contact us. An error has occurred. Please try again later. Next Subscribe Thanks for subscribing to CPP Investments Sign up for our latest news, insights, reports and other information about CPP Investments Email address * Please enter valid email id Job title Select Job Title Associate Analyst Consultant advisor Manager/supervisor Government official/regulator General manager/director Board director Chairman/board member VP/SVP/EVP President Partner/Owner/Entrepreneur Parent/guardian C-level other Chief Human Resources Officer Chief Marketing Officer Chief Financial Officer Chief Sustainability Officer Chief Digital Officer Chief Technology Officer Chief Operating Officer Educator/professor Student Editor/reporter Other Organization How did you hear about CPP Investments? Select Source CPP Investments alumni CPP Investments employee or board member CPP Investments portfolio company Online search (e.g. Google) Social media Other What news would you like to receive? * News and updates from CPP Investments Latest news from the Insights Institute Consent * By checking here, you are subscribing to receive our newsletters and other similar types of insights and reports by email, and permit CPP Investments to use cookies and similar technologies to analyze your interactions with our emails. Unsubscribe at any time by clicking the link in the newsletter’s footer. Visit our Privacy Policy for more information. Questions or concerns? Contact us. Please fill in required fields An error has occurred. Please try again later. ShareTweetShare Five Minutes with Michel Leduc Michel Leduc, Global Head of Public Affairs and Communications, explores evolving industrial policy, concentration risks, and why investors Video January 31, 2024 “Challenge your beliefs”: Investing in times of geopolitical turbulence Over the past several years, Ed Cass has seen first-hand how labour issues, political tensions and technological change have impacted asset Article January 31, 2024 Who will win the global AI race? Artificial Intelligence (AI) has the potential to revolutionize the way the global economy works and how many businesses generate profits. Article January 31, 2024 {:}