Asset manager Apollo and EnCap Energy Transition Fund I said that funds managed by Apollo affiliates will acquire a 50% stake in Broad Reach Power, a utility-scale energy storage and renewable energy platform in the U.S.
The affiliates will acquire the stake from venture capital firm EnCap Investments and its co-investment partners Yorktown Partners and Mercuria Energy. EnCap and its partners will retain the other 50% stake and, together with the Apollo Funds, commit to invest up to $400 million of additional equity to fund Broad Reach’s expansion and project pipeline.
Broad Reach has more than 1.4 GWh of storage assets in operation or under construction and has a 21 GW portfolio of utility-scale wind, solar, and energy storage power projects across the country.
A statement said the acquisition by Apollo represents the first sale by EnCap’s $1.2 billion Energy Transition Fund I. In addition to Broad Reach, EnCap Energy controls a portfolio that includes Catalyze Energy (distributed commercial and industrial solar plus batteries), Solar Proponent (large -scale solar), Triple Oak Power (wind power), and Arbor Renewable Gas (clean fuels), among others.
Earlier, Apollo Funds committed more than $820 million to NextEra Energy Partners’ for its stake in a renewable energy generation portfolio; formed a venture with Johnson Controls to provide sustainability and energy efficiency services; invested in US Wind, an offshore wind developer; formed a joint venture with renewable energy royalties company Great Bay Renewables; invested in Stagecoach Royalty, a renewable energy land royalties platform; acquired a majority stake in Arlington Valley, a utility scale solar asset; acquired Tullahennel, a wind power asset in Ireland; and invested in sustainable bioenergy producer AS Graanul Invest.
The transaction is subject to customary closing conditions and is expected to be completed by the end of the year. White & Case LLP served as the legal advisor and Citi served as the sole financial advisor to EnCap and Broad Reach. Kirkland & Ellis LLP served as legal counsel to the Apollo Funds.
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