UAE’s Masdar Adds to Renewables Portfolio with $1.4B Deal

United Arab Emirates clean energy giant Masdar on Sept. 24 said it plans to acquire Brookfield Renewable’s Saeta Yield in a deal that values the company at $1.4 billion.

The proposed deal, expected to close near the end of 2024 pending customary approvals, includes Spain-based Saeta’s portfolio of 538 megawatts (MW) of wind assets in Spain, 144 MW of wind assets in Portugal and 63 MW solar PV assets in Spain along with a 1.6-gigawatt (GW) development pipeline, according to a news release.

Excluded from the deal is Saeta’s regulated portfolio of 350 MW of concentrated solar power assets, which Brookfield will retain and continue to operate.

“Representing one of Spain’s largest renewable energy transactions, this landmark deal with Brookfield Renewable builds on Masdar’s strong growth story, demonstrating our commitment to the EU’s wider net zero by 2050 target and unlocking new capacity,” said Sultan Al Jaber, Masdar chairman, UAE minister of Industry and Advanced Technology and COP 28 president.

The deal came nearly two months after Masdar announced an $887 million investment to acquire a 49.99% stake in 48 solar plants controlled by Spanish utility Endesa.

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Jointly owned by TAQA, Abu Dhabi National Oil Co. and Mubadala, Masdar aims to grow its renewable energy portfolio capacity to 100 GW by 2030.

According to McKinsey & Co., Spain and Portugal have strong renewable energy profiles and have lower production costs compared to many other locations in Europe. The firm said solar energy is about 20% to 25% more economical in Spain and Portugal than in Central Europe, and the region’s wind resources are about 5% to 10% higher than the EU average.

“This deal consolidates our footprint in the Iberian market by acquiring a well-established renewable platform, with a strong operational portfolio and management team, and tangible near-term and long-term growth opportunities, supporting Masdar's expansion plans to reach 100 GW by 2030,” Masdar CEO Mohamed Jameel Al Ramahi said.

Canada-based Brookfield purchased Saeta in 2018 with ambitions to divest noncore asset, optimize the company’s capital structure and position it for growth via hybridization, repowering, greenfield development and accretive tuck-in opportunities, according to the news release. The sale aligns with Brookfield’s asset rotation strategy to recycle capital to fund growth activities, it added.

“As global leaders in clean energy development, Brookfield and Masdar will continue to be important players to accelerate the journey towards a net-zero economy,” said Mark Carney, chair and head of transition Investing at Brookfield.

Saeta CEO Álvaro Pérez de Lema said the company is looking forward to starting a new chapter with Masdar as the new controlling shareholder, “further consolidating its leadership position as an independent producer of renewable energy in Iberia,” he said.

Citigroup Global Markets Ltd. served as transaction adviser for Masdar, with Linklaters as legal adviser, UL as technical adviser and KPMG as financial and tax adviser.

Brookfield retained Santander and Société Générale as its transaction advisers, Uría Menéndez as legal adviser, G-Advisory as technical adviser and KPMG as its tax adviser.