Alternative investors KKR and GCM Grosvenor have together made a structured investment in renewable energy developer Arevia Power to ramp up new solar and wind projects throughout the United States.
KKR announces a ‘significant’ structured investment in Arevia to inject capital into a solar and wind expansion in the US, with participation from GCM Grosvenor.
The investment builds on KKR’s strategy of providing renewable energy investment platforms globally and utilises GCM’s experience in infrastructure asset management.
KKR and GCM are alternative asset managers, deploying capital into high-growth areas, showing the place of renewable energy as a strategic platform.
KKR sponsors investment funds that invest in private equity, credit and real assets and has strategic partners that manage hedge funds. GCM is also an alternative asset management solutions provider.
Responsible renewable energy development
Arevia is a dedicated solar and wind project developer that originates, permits, and manages renewable energy projects. The announcement of the investment said that Arevia pays special consideration to environmental and community impacts. These are the sensitive areas that have been barriers to renewable energy growth.
Mr. Boyadjian, Managing Partner at Arevia , said “KKR is an outstanding new strategic partner with deep renewables and infrastructure experience, and GCM Grosvenor is an equally accomplished infrastructure investor who has also been particularly successful in investing in partnership with organized labor groups.”
Alongside the investment, Arevia has executed a Responsible Contractor Policy (“RCP”) for its entire clean energy portfolio throughout the United States. The RCP actively promotes advancing the skills of the workforce, and providing fair wages and health and safety on the job.
Mr. Boyadjian added “Together, this platform investment and new relationship with two world-class investment firms will super-charge our development of clean energy solutions while delivering good-paying jobs and leading the way on responsible development.”
Arevia’s founders, industry veterans Mark Boyadjian and Ricardo Graf, have fully developed over 2GW of utility-scale solar photovoltaic infrastructure.
Alternative investment’s synergy with and appetite for renewable energy
KKR is making its investment in Arevia from its managed insurance accounts. The investment from GCM Grosvenor will come from its infrastructure practice.
GCM has approximately $71 billion in assets under management across private equity, infrastructure, real estate, credit, and absolute return investment strategies.
Samuel Mencoff, a Director on KKR’s asset-based finance team, said: “We’re thrilled to build on our strategy of investing behind premier developers like Arevia as the need and demand for renewable energy rapidly accelerates.”
KKR is throwing its weight behind renewable energy development across the world as it eyes the financial return in the inevitable global energy transition.
In the IEA’s (International Energy Agency’s) World Investment Report, 2021, renewables were expected to account for 70% of the 2021 total of $530 billion spent on all new generation capacity with the remaining $290 billion of global power sector investment taken up with investment in grids and storage. Global investment in renewable energy in the first half of 2022 was up 11% on the previous year, totalling $226 billion.
KKR is marking out its position in this booming investment landscape. It launched a solar-focused investment company at the end of 2021, Stellar. In April of 2022 it launched Aster Renewable Energy to concentrate on Asia; Vietnam and Taiwan.
It also set up Virescent Infrastructure to acquire, own and operate renewable energy assets in India. Since 2011, KKR and its subsidiaries have deployed over $15 billion in equity to invest in renewable assets, such as solar and wind, which have an operational power generation capacity of over 23GW, as of December 31, 2021.
KKR, formerly Kohlberg Kravis Roberts & Co., is the second largest private equity firm after Blackstone with $459 billion in assets under management.