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2023, robust activity with notable achievements.

In 2023, Tevali Partners underwent substantial transformation, driven by several especially noteworthy large-cap achievements.

A highlight of the year involved strengthening our partnerships with several key market players including Quaero Capital, CVE and Corsica Sole as well as welcoming new ones such as Q Energy, Altarea, and Infranity. These alliances strengthen our position as a boutique trusted advisor in the industry and reinforces brand and new visual identity. It aligns seamlessly with our strategic positioning and embodies our commitment to our core values of demanding excellence and expertise.

We successfully executed multiple major transactions, including Infranity’s minority stake acquisition in IEL (Iridium) and Q Energy’s sale of a 170 MW asset portfolio (Condor). The team also provided counsel to EnergieTeam in its refinancing operations of an asset portfolio of over 300 MW (Thoraga) and designed and structured an innovative €30M financing plan for CVE backed by a large solar portfolio under development (Praia).

In total, our team coordinated refinancing totaling €650M and facilitated M&A transactions with a value in excess of €2bn.

A resilient market within a challenging macroeconomic context

Our market analysis for 2023 revealed a landscape of evolving challenges and strategic shifts. A major point of concern is the continued market consolidation, as many players have integrated into larger groups this will constrain the future dynamics of the market. On the core infrastructure deals front, there has been a noticeable increase in liquidity costs impacting recent transactions. This economic pressure has led historical players in renewable infrastructure to pivot their investment strategies. Instead of continuing along traditional paths, they are now redirecting their investments through renewable asset platforms.

Up until mid-2023, the expected IRR by investors had not aligned with this shift in liquidity costs. The renewable energy infrastructure market had indeed shown a degree of resilience to these broader macroeconomic conditions. However, post-mid-2023, there has been a trend towards homogenization with other sectors, leading to a repricing of expected IRRs, now trending towards the high single digits. Additionally, a significant trend observed in the M&A processes is the prevailing presence of strategic investors (industrials) over financial investors (funds).

Tevali Partner' Outlook for 2024: a year of growth, innovation, and expanded market impact

As we enter 2024, Tevali Partners is poised for a year of growth and expanded capabilities. The beginning of the year marks the arrival of new team members and a strategic enhancement that positions us to extend our reach in mid-cap operations. This reinforcement of our team reflects our ongoing efforts to broaden our service offerings and deepen our impact on the market. A key focus for us in 2024 will be to build upon the groundbreaking transaction we facilitated for CVE. We intricately structured a bond financing model anchored to a portfolio of development projects. This success story not only showcases our expertise but also sets a precedent for future endeavours.

Currently, we are assisting a developer in securing financing and equity for a significant 600MW platform (mid to late stage development), signalling a promising opportunity for interested parties as we prepare to launch the consultation (interested parties are welcome to contact us). The first quarter of 2024 has already seen a robust deal flow, reflecting our growing team's dynamism and effectiveness. With a renewed identity that reflects our forward-thinking approach, Tevali Partners is well-equipped to face challenges and opportunities. We extend our gratitude to our clients and partners for their continued trust and look forward to forging stronger relationships and achieving shared successes in the year ahead.

2024 renewable energy M&A trends: shifting dynamics and emerging markets

The M&A market within the renewable energy sector is anticipated to undergo significant changes in 2024, particularly within private equity investments. A key factor driving this change is the rising cost of liquidity, which will likely constrain financing sources. Consequently, greater reliance is being placed on equity capital for investments, signifying a departure from leveraged strategies.

Additionally, the challenges faced by equity funds in raising capital from their LPs towards the end of 2022 and throughout 2023 are likely to manifest in 2024. This scenario will result in a more selective investment approach, with an increased tendency towards club deals among partner funds. Such collaborations could become a strategic way to pool resources and share risks, particularly in the face of tighter financing conditions.

Furthermore, 2024 is set to witness the strong emergence of new markets within the renewable energy sector, such as energy storage, energy efficiency, ecomobility, and hydrogen. These emerging fields offer substantial opportunities for diversification and expansion for companies engaged in the energy transition. This broadening of the market landscape not only provides new avenues for investment but also allows established players to expand their services and adapt to the evolving energy needs and technological advancements.

Overall, these factors collectively point towards a dynamic and potentially transformative year for M&A activities in the renewable energy sector.

Be stronger than your excuses! Go 2024!

Steven Kassab & Michael Tobelem
Founding Partners

Specializing in mergers and acquisitions in the energy and infrastructure sector for mid cap, Tevali Partners was recognized by the Leaders League for its leading strategic expertise.

This ranking distinguishes a year marked by high-level advisory work, such as those offered to Q Energy in the sale of a 170 MW asset portfolio, Infranity for its minority stake acquisition in IEL and Quaero Capital on the divestment of the assets of its Fund 1 for over 106 MW and for its minority stake acquisition in EnergieTeam. The team also provided counsel to EnergieTeam in its refinancing operations of an asset portfolio of over 300 MW (Thoraga), one of the largest operations in the french refinancing sector this year, among 5 other deals. The operations carried out with Quaero, Q Energy and Infranity strengthen our position in the mid-cap deals while the operation with EnergieTeam demonstrates our ability to handle large-cap deals.
 

This recognition consolidates Tevali Partners' position as one of the key players in the energy transition in France. Having initiated its activity in 2009, Tevali Partners is a pioneering M&A boutique in the market.

Initiatives & Energies Locales (IEL) is a full-service French renewable energy operator that has evolved from a wind developer to become a leading multi-energy Independent Power Producer (IPP) in the western part of France. The company operated 147 MW in 2022 and plans to develop and operate more than 550 MW by 2025 with an overall pipeline of 1.2 GW.

In this growth context, IEL was looking for an investor with a real interest in the energy transition to partner with. The contemplated transaction included a capital increase alongside the acceleration of IEL's growth to develop the group by building new capacities in western France and participating in the decarbonization of the economy.

Infranity, a very attractive investor in the financing of the energy transition in Europe, has invested in 14 renewable energy transactions since the creation of the fund in 2018 for a total volume of 1.3 billion euros. The financial support provided by Infranity is based on a secured pipeline of greenfield renewable energy assets for 644 MW, representing 66% of their targeted net operational capacity for 2027. In addition to financially contributing to the company's growth, Infranity has acquired a minority stake in the company.

In this transaction, Degroof Petercam IB and Tevali Partners were mandated by Infranity as financial advisors to review the investment opportunity as well as to conduct the transaction. Clifford Chance was appointed as legal advisor and Syneria as technical advisor.

For Steven Kassab, co-founder of Tevali Partners: "We are proud to have participated in this decisive operation for the growth of IEL's business by accompanying Infranity, a very dynamic fund in the financing of the energy transition in Europe. We have positively assessed this investment opportunity, which seems particularly relevant in a context of strong growth for IEL."

On July 19, 2023, our team had the opportunity to meet Pierre Mastalski. This "adventurer of enterprise and the sea" shared with us the incredible story of his solo crossing of the Atlantic on a rowboat, whose water purification system was powered by a small photovoltaic module.

This is a powerful symbol of the revolutionary potential of renewable energies, but also of personal achievement and determination. Pierre Mastalski has been a companion on Tevali's journey for over a decade: in 2012, when he was looking for sponsors for his odyssey, we supported him in preparing for his extraordinary journey, which eventually took him from Dakar to Cayenne in 42 days at sea. His commitment aligns with our own values and continues to provide inspiration to our team.

To mark this event, we organized a summer drink, bringing together current and former Tevali employees, to share this memorable meeting together.

The Tevali team was complete for the Renewable Energy Regatta!

From the Frioul port in Marseille, our colleagues embarked on a day of regatta with other companies in the sector. 40 companies were present: developers, turbine manufacturers, consultants, lawyers... an opportunity for the energy transition and renewable energy sector to weave and cultivate connections.

For the Tevali Partners team, it was also an opportunity to proudly display our new logo and our new colors, revealed this week.

On December 1, 2022, Corsica Sole inaugurated the largest storage power plant in continental Europe, with the support of its shareholder Mirova, via its Mirova Energy Transition 5 fund. Michael Coudyser, CEO of Corsica Sole, said: "This project is an important step for the development of electricity storage solutions in Europe. We financed this project in 2021 with our shareholder Mirova without recourse to any public subsidy." But far from being concluded, Corsica Sole wants to develop this financing and has given Tevali Partners a mandate to assist it in this process.

€34M: a debt raising on an industrial scale for Corsica Sole

The financial advisor dedicated to the energy transition then launched a consultation with lenders of all kinds - banks and debt funds - in a complex context in two respects: the increase in interest rates and the rising price of electricity. 

Steven Kassab, Partner, and founder of Tevali Partners: "For this large-scale industrial operation, the banks' offers were less suitable because the financing of these infrastructures is not yet standardized. The debt funds were more ingenious and flexible in the way they dealt with the different levels of risk inherent in this operation, thus ensuring an efficient sizing of the debt as well as an appropriate management of the covenants over the life of the project".

In the end, Edmond de Rothschild Asset Management was selected, via its BRIDGE infrastructure debt fund, for a €34 million debt. 

Shirley Chojnacki, Investment Director of the BRIDGE fund at Edmond de Rothschild Asset Management: "What particularly interested us in the Deux-Acren power plant project was its innovative dimension, with sufficient critical size. There are very few similar projects in operation on the market. Furthermore, energy storage allows for the accelerated integration of renewable energies into the energy mix, which is a key investment theme for us".

Jean-Francis Dusch, CEO of Edmond de Rothschild UK, CIO of Benjamin de Rothschild Infrastructure Debt Generation (BRIDGE) and Global Head of Infrastructure, Real Assets & Structured Finance comments: "We are very proud of this new investment which fits perfectly into our infrastructure debt portfolio and our commitment to the Energy Transition, a core priority of Edmond de Rothschild Asset Management (EDRAM). We are delighted with this transaction made in partnership with Corsica Sole and Mirova".

The largest storage power plant in continental Europe

The Deux-Acren power plant can store a quantity 100 MWh of energy using lithium-ion batteries, at a power level of up to 50 MW. This allows it to ensure the regulation of the frequency on the European electrical transport network. This energy storage helps to stabilize electrical networks by ensuring the balance between production and consumption. Today, this function is performed by oil or gas-fired power plants, making the European grid dependent on fossil fuels.

Connected to the public electricity grid, storage power plants provide "services" to the grid operator to ensure the stability of energy distribution. These services have different functions: regulating the frequency of the network, compensating for the intermittency of renewable energies, and storing energy during low consumption periods to be reinjected during high consumption.

Steven Kassab, Partner, and founder of Tevali Partners: "Battery energy storage on an industrial scale is one of the newest and therefore least mature technologies in the energy transition sector. We face a complex business model that is less familiar to lenders. Market revenues are based on calls for tender that are organized daily to go and regulate the frequency of the network. Infrastructure financiers like to have contracted and secured revenues. But in this kind of project, the business model is 'elastic' dependant on the market context".

Fin d’année 2022, CVE Green Finance a conclu un financement obligataire novateur de 20 M€, pouvant être porté à 30 M€ en 2023 avec la société de gestion Edmond de Rothschild Asset Management. En accompagnant CVE dans la recherche d’un investisseur de premier plan et dans la structuration du financement, le soutien de Tevali Partners a été déterminant dans la conclusion de cette transaction.

Le financement est adossé à un portefeuille d’actifs solaires en développement situés en France et bénéficiant a minima d’une promesse de bail signée, d’une capacité totale de 293 MW. En 2023, le portefeuille d’actifs pourrait être étendu à d’autres zones géographiques dans lesquelles CVE opère. Cette ligne obligataire d’une maturité 5 ans et remboursable in fine sera intégralement libérée à un stade de développement des projets encore très amont, et son dimensionnement repose sur la valeur prospective du portefeuille financé une fois celui-ci ayant atteint le stade « Ready to build » (« RTB »). 

Ce financement vise à accompagner le groupe CVE dans ses activités de développement sur les prochaines années en France et à l’étranger. Cette ligne innovante permettra entre autres à CVE d’optimiser ses flux de trésorerie en couvrant ses dépenses de développement à venir sur les 5 prochaines années ainsi que de gagner en réactivité et en compétitivité notamment en cas d’opportunités de rachat de centrales dont le développement n’est pas encore abouti (stade pre-RTB). 

« En total alignement avec notre métier de conseil financier indépendant spécialiste de la transition énergétique, nous sommes ravis d’avoir accompagné CVE Green Finance dans la réalisation de ce deal qui vise à l’appuyer dans ses activités de développement sur les prochaines années en France et à l’étranger » commente Steven Kassab, Associé co-fondateur de Tevali Partners. 

« Cet investissement est un excellent ajout à notre portefeuille de dette d’infrastructure. L’effort de transition du mix énergétique vers plus de productions renouvelables est un thème d’investissement important pour nous, et ce financement aux côtés de CVE s’inscrit dans la stratégie d’investissement de conviction d’EDRAM.  Nous sommes ravis d'être un partenaire financier à long terme de CVE. En apportant ce financement, nous soutenons également le développement et la croissance de la société qui consolide sa position de leader du secteur » expliquent Jean-Francis Dusch, CEO d’Edmond de Rothschild UK et CIO de Benjamin de Rothschild Infrastructure Debt Generation (BRIDGE) et Shirley Chojnacki, Investment Director BRIDGE.

« Nous sommes ravis de la mise en place de ce financement sur un portefeuille en cours de développement, ce qui complète bien les mécaniques de financement de projets plus classiques que nous connaissons. Cela concrétise une réflexion menée par CVE et ses partenaires depuis plus de 18 mois sur un produit hybride, original et répondant aux besoins du groupe. L’ajout de cet outil financier dans la palette déjà existante de CVE, va permettre au groupe d’amplifier sereinement ses efforts de développement en France et à l’étranger et envoie un signal fort quant à la robustesse de notre portefeuille » conclut Arnaud Réal del Sarte, DG Finances de CVE.

Specializing in mergers and acquisitions in the energy and infrastructure sector for small & mid cap, Tevali Partners was recognized by the Leaders League for its leading strategic expertise.

This ranking distinguishes a year marked by high-level advisory work, such as those offered to Mirova during the acquisition of CorsicaSol, to Amundi during the takeover of Opale, as well as to Quaero Capital in the acquisition of an onshore portfolio. The team also advised Watt & Co in its fundraising with Andera Partners.

This recognition consolidates Tevali Partners' position as one of the key players in the energy transition in France.