EQT’s latest flagship infrastructure fund, which just closed at €15.7 billion, is more invested in the energy transition than ever before. It has bought US waste-to-energy firm Covanta in a $5.3 billon deal; solar developer Cypress Creek Renewables, in a transaction reportedly worth over $2 billion; and an €881 million take-private for Spanish solar energy firm Solarpack. The latter, announced in June, was EQT’s then second renewables investment, the first being O2 Power in India last year through its Temasek joint venture.
“The renewables sector has gone through a development and is more mature now than when we started [investing] at EQT Infrastructure. We are also large enough now to be able to buy more mature and stronger platforms. We have always had a strong advisory network in the energy sector, and we are now trying to deploy it in the renewables space,” Lennart Blecher, head of real assets’ advisory teams and deputy managing partner, told affiliate title Infrastructure Investor.
When Infrastructure Investor caught up with Blecher in 2017 – the same year GIP spent a record $5 billion buying Equis Energy – he said, “you don’t see much of renewables or things like that in our portfolio” because “we are focusing on buying assets where we can do something operationally”.
As the first private markets firm to set science-based targets to fight climate change, decarbonisation is now at the heart of all of EQT’s investments.
“EQT is a value-oriented, purpose-driven organisation and one of our main purposes is to future-proof companies and have a positive impact in everything we do. So, everything EQT Infrastructure is doing these days has a very strong sustainability focus,” Blecher said. “When we look at buying a company, we always try to identify three to five sustainability KPIs that should be transformative for a company. We measure those on a yearly basis using our own internal framework and we want to see yearly improvements.”