KKR to support European solar player's Japan expansion plans

The PE firm now owns an 80% interest in Gestamp, which has been renamed X-Elio. The company has operations in Europe, North America, South America and Asia, but sees particular growth potential in Japan. X-Elio currently has two plants in the country with 50 megawatts of operational capacity, and it expects installed capacity to reach as much as 600 MW by the end of 2017. Half of this is likely to come through bolt-on acquisitions and the rest through organic growth.

Japan has become one of the world's largest solar markets, partly driven by the government's decision to reduce nuclear capacity in the wake of the 2011 Tohoku earthquake. This has forced the country to seek alternative sources of energy, sparking a solar installation boom buoyed by generous government incentives. More than 11 gigawatts of capacity was set to be added in 2011, according to Bloomberg.

"We have ambitious plans for Japan, which is one of the most important solar energy markets in the world," said Jorge Barredo, X-Elio's CEO, in a statement. "And we are going to closely cooperate with local Japanese companies and manufacturers to develop our business in this exciting market."

KKR's investment is predicated on a broader policy-led shift in the global energy market as governments take more substantive action to tackle climate change. The SolarPower Europe Association estimates that worldwide photovoltaic capacity reached around 230 GW last year, up from 50 GW in 2014, and it is forecast to more than double over the next five years.

X-Elio was only founded in 2005 but is on course to have 2.5 GW of installed capacity by 2020. It is currently present in 18 countries with 300 MW of projects in operation or under construction. The company has participated in the development of over 600 MW of projects to date.

KKR made the investment through KKR Global Infrastructure Investors II, a $3.1 billion fund that backs infrastructure projects in a variety of areas. The X-Elio acquisition boosts the firm's equity investment in renewables by almost 50% and its solar capacity by more than 50%.

Other private equity investors in the Japan solar space include Equis Funds Group and Partners Group, which led a $250 million investment in Japan Solar - a dedicated solar platform operated by Nippon Renewable Energy. The platform's ongoing capital needs saw Equis raise a $400 million co-investment pool alongside its second fund. It will be used to support Japan Solar and an India and Southeast Asia wind energy platform.

In the past six months, Hudson Clean Energy Partners has also entered into two joint ventures - with Dubai-based Adenium Energy Capital and Sky Solar, respectively - that will invest in Japan solar projects.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Europe
• North Asia
• Cleantech
• Infrastructure
• Buyouts
• Infrastructure
• Cleantech
• KKR
• buyout
• Europe
• Japan