Canadian natural gas pipeline giant Enbridge has bought US renewables developer Tri Global Energy (TGE) for US$270 million in cash and assumed debt.
Up to another US$500 million could be paid if TGE successfully executes its project portfolio, which consists of up to 7GW of solar and wind projects.
Calgary-headquartered Enbridge, which owns and operates pipelines throughout Canada and the US transporting crude oil and natural gas across the longest pipeline system in North America, said the acquisition “will enhance Enbridge’s renewable platform and accelerate our North American growth strategy”.
“TGE’s significant development pipeline, coupled with our renewable capabilities, and existing self-power opportunities, make this a truly synergistic investment that further positions us to grow organically at attractive equity returns,” said Al Monaco, Enbridge’s president and CEO.
“We’re excited to be welcoming the TGE team to Enbridge, further strengthening our capabilities as we ramp up our renewable business.”
Enbridge said it expects “North American renewable power fundamentals to remain robust”, pointing to state and federal renewable targets as well as increased corporate demand for clean energy.
“TGE’s large development portfolio is well-positioned to capitalise on this growth, including 3.9GW of renewable generation projects TGE previously sold to operators, which will generate development fees and accretion to distributable cash flow per share in the first year following the acquisition of TGE,” the company said in a statement.
TGE has 3GW of late-stage, wholly owned development projects that are expected to be placed into service between 2024 and 2028, which Enbridge said would provide a “visible ramp up in cash flows”.
TGE’s development team will remain in place following the buyout, which Enbridge said would ensure “continuity of ongoing development activities”.
CIBC acted as financial advisor to Enbridge and Eversheds Sutherland acted as its external legal counsel.
