Abengoa, EIG to jointly invest $2.5bn for creating new entity

Abengoa and EIG Global Energy Partners intend to invest $2.5bn for setting up a new entity which will acquire over $9.2bn of renewable energy projects.

Abengoa Projects Warehouse 1 (APW1), the new venture, will be set up within the following four to six weeks.

Owning an interest of 55%, EIG will be the majority stakeholder for the firm.

Abengoa will own the remaining 45% stake in APW1.

It will acquire Abengoa’s renewable and conventional power generation, power transmission and water management assets in the US, Mexico, Brazil and Chile, the Spanish company informed.

APW1 will sign an existing right-of-first-offer (ROFO) deal formed between Abengoa and Abengoa Yield. It will also sign another ROFO for making new investments in Abengoa’s future projects.

APW1 intends to reinvest 100% of its initial equity for a second set of projects.

It will extend its activity for the next eight years and increase its initial value of $9.2bn by an additional $6bn to $7bn.

Since 2007, Abengoa had been partners with EIG, which is an US based specialist investor in energy and energy-related infrastructure. The firms had been co-investors for development of an ethanol facility in France.