Canadian pension funds, the Ontario Teachers' Pension Plan (TPP) and the Public Sector Pension Investment Board (PSP) are to invest in solar energy projects.
The pension funds have teamed up with the commercial bank Santander to acquire solar, wind and water infrastructure assets the bank owns.
Santander, previously owning the assets fully, will now share ownership with the two pension funds under a new joint venture company.
The joint acquisition of renewable energy and water infrastructure projects will create an asset portfolio, worth US$2 billion, in operation, or in development renewable energy projects across seven countries.
The transaction will close the beginning of 2015 with significant new investments expected over the next five years from the pension TPP and PSP pension funds.
Bruno Guilmette, senior VP of infrastructure investments at PSP said the investment fits with PSP’s “strategy of deploying capital in sizeable opportunities that offer long term revenues and growth potential along with solid partners".
It also allows PSP Investments to continue to develop its portfolio of private energy assets “while contributing to environmentally sustainable energy production” said Guilmette.
TSP and PSP’s investments were led by their Infrastructure Group, which manages TSP’s global portfolio of C$11.7 billion, and PSP’s global portfolio of C$6 billion.
Santander's sale was led by its Asset & Capital Structuring team, which will also manage the portfolio and lead investments in new global renewable energy, and water ventures. Macquarie Capital also acted as financial advisor to Santander.