QIC and IFM Investors split Enwave Energy’s North American assets
Two of Australia’s biggest asset owners, IFM Investors and QIC, have split the North American assets of Enwave Energy.
Two of Australia’s biggest asset owners, IFM Investors and QIC, have split the North American assets of Enwave Energy following the decision by Brookfield to sell out.
IFM partnered with the Ontario Teachers’ Pension Plan board to acquire Enwave’s Canadian operations for $C2.8bn ($2.9bn) with each investor to hold a 50 per cent stake.
QIC, whose clients include Australia’s largest superannuation funds controlling $730bn of retirement savings, teamed up with the privately run financial services player Ullico to buy Enwave’s US unit.
Enwave is best known for owning the largest district energy system in North America which uses underground pipes to pump steam or hot water for heating systems in densely populated cities and chilled water for air conditioning.
District energy uses less carbon than many traditional electricity sources.
Enwave serves 340 clients and operates across eight states in the US and 320 customers in Canada, providing a utility-style income stream for its new owners.
Energy intensity can be reduced by up to 90 per cent for cooling and 20 per cent for heating, according to IFM’s global head of infrastructure Kyle Mangini. “It’s less expensive and it’s got a smaller carbon footprint, so it makes tremendous sense for buildings to be hooked up to district energy,” Mr Mangini told The Australian.
Enwave pipes cold water from the bottom of Lake Ontario to cool hospitals and data centres in the centre of Toronto.
“Instead of having compressors, which are very expensive, you’re using the cold water from the lake so there are tremendous savings in energy intensity and also emissions,” Mr Mangini said.
The $150bn IFM also splashed a blockbuster $8bn cash offer on January 26 for a stake in Spanish power and renewable operator Naturgy Energy, which plans to double its clean energy capacity in Australia. Naturgy’s major shareholders, GIP and Rioja Acquisition, which control 41 per cent of the company, ruled out accepting the offer but IFM indicated it was in for the long haul.
“I think any time there is a deal announced of considerable size, it’s always going to come with an appropriate level of consideration. But generally I have found that we’re pretty welcome,” Mr Mangini said.
“We’re long-term investors; we represent pension money so it’s the kind of investment that is generally pretty welcome because we’re there to build and invest over decades.”
The bid is subject to IFM reaching a minimum acceptance level of 17 per cent of Naturgy’s shares.
Mr Mangini said he was currently focused on securing regulatory approvals for the deal rather than holding talks with Naturgy shareholders.
IFM was beaten in December to buy Shell’s Queensland LNG infrastructure for $US2.5bn ($3.3bn) by US investment fund Global Infrastructure Partners.
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