Energy Infrastructure Case Studies
Since it was founded in 2014, Credit Suisse Energy Infrastructure Partners (CSEIP) has invested in a number of high-profile energy infrastructure businesses and projects. These include:
- Target company: Swissgrid AG
- Location: Switzerland
- Asset type: Regulated electricity transmission grid
- Investment year: 2014/2016
- Ownership stake: 36% together with industrial partner
- Industrial partner: BKW Energie AG, a Swiss utility
- Origination: Exclusive situation with industrial partner and utilization of shareholder rights
Swissgrid is the exclusive electricity transmission grid operator in Switzerland. It owns, maintains and operates the national transmission system spanning over 6,700 km of grid.
The main purpose of Swissgrid is to ensure efficiency in terms of security, reliability and cost of the transmission grid. Swissgrid enjoys a state-protected market monopoly. It operates under a highly attractive and stable cost-plus regulation with a regulator that has maintained a strong track record over several years. Given the highly stable political and regulatory environment in Switzerland, Swissgrid is considered one of the most attractive regulated transmission assets in a global context.
CSA Energy Infrastructure Switzerland, a Swiss-focused investment vehicle managed by CSEIP, together with BKW, is the largest shareholder in Swissgrid, holding 36.4% of the total share capital. The shares were acquired in two transactions. In 2014, CSA Energy Infrastructure Switzerland acquired 49.9% of BKW Netzbeteiligung AG (BKW-N), a special-purpose vehicle that held a 12% stake in Swissgrid. In a subsequent transaction, BKW-N acquired Swissgrid shares from Alpiq, a Swiss utility, through execution of BKW-N’s preemption rights in 2016. CSA Energy Infrastructure Switzerland is the first and largest financial investor in the Swiss transmission grid.
- Target company: Fosen Vind DA
- Location: Norway
- Asset type: Onshore wind farm with long-term contracted energy offtake agreements
- Investment year: 2016
- Ownership stake: 40%
- Industrial partner: Statkraft, largest Norwegian utility; TrønderEnergi, local distribution grid operator
- Origination: Exclusive situation
A CSEIP-managed fund of European institutional investors is financing Europe’s largest onshore wind power project on the Fosen peninsula in central Norway, through project company Fosen Vind. Once construction is completed in 2021, the asset will consist of 278 Vestas turbines distributed across six onshore farm park sites, comprising 1,000 MW of total installed capacity.
The wind farms exhibit offshore-like wind conditions, given their proximity to the shore. Fosen Vind is considered to be one of the most cost-efficient projects in Europe, based on levelized costs of energy, in particular due to the large economy of scale.
A 40% stake in the project was secured through a syndicate of institutional investors and coinvestors led by CSEIP in February 2016. The project’s cash flow stability is secured through a long-term power purchase agreement with a large industrial company as well as a long-term electricity certificate agreement with a regional utility, which hedges energy prices over the next two decades. The six wind farms will generate enough power to provide over 170,000 Norwegian households with electricity.
- Target company: Transitgas AG/FluxSwiss Sagl
- Location: Switzerland
- Asset type: Gas transmission pipeline with long-term contracted revenues
- Investment year: 2016
- Ownership stake: 37%
- Industrial partner: Fluxys, Belgium state-owned gas company; Swissgas, Swiss cooperation of regional gas grid companies
- Origination: Exclusive situation with Swissgas, execution of Swissgas’ shareholder rights as existing shareholder
Transitgas is a 293-kilometer-long, unregulated, long-term contracted natural-gas pipeline. Located in Switzerland, it is the only connecting pipeline between France, Germany and Italy. The three markets combined represent around 40% of European demand.
Today, Transitgas mainly transports natural gas from the Netherlands and Norway all the way south to Italy. This supply is especially critical to Switzerland and Italy, where it delivers a significant amount of the gas demand every year. Thus, the pipeline enjoys a strong, sustainable market position in a pan-European gas context.
A syndicate led by CSEIP, together with Swissgas and Fluxys as industrial partners, successfully acquired a 44.9% stake in FluxSwiss from Global Infrastructure Partners (GIP) in June 2016. FluxSwiss is the transmission system operator of the Transitgas pipeline, commercializing 90% of the pipeline’s total capacity. It holds 46% of the pipeline asset company Transitgas AG.
The stake was acquired through mutual execution of shareholder rights of the existing investors, Swissgas and Fluxys, outside of a market auction. CSEIP holds a total of 36.6% in Transitgas via a special-purpose vehicle that is co-owned by two CSEIP-managed vehicles, including CSA Energy Infrastructure Switzerland, plus institutional Swiss coinvestors.
- Target company: Nysäter Wind AB
- Location: Sweden
- Investment type: Onshore wind farm with long-term power purchase agreement
- Investment year: 2018
- Involvement: 80%
- Industry partner: E.ON, German energy group
- Origination: Exclusive position
A fund for institutional European investors managed by CSEIP is financing one of the largest onshore wind farms in Europe via the company Nysäter Wind AB. As part of a long-term operation and maintenance agreement, 114 turbines from the German manufacturer Nordex, which together have a total capacity of 500 MW, will be put into operation. The wind farm will generate enough energy to supply approximately 460,000 households with electricity. Cash flow stability and a long-term project financing structure is achieved thanks to a long-term power purchase agreement.