Oil majors likely to court Eddie O’Connor’s Mainstream

Renewables group plans multibillion dollar, multigigawatt construction programme

Beinn an Tuirc wind farm, Scotland. Mainstream swung into a €487.5m profit last year from a €5m loss for 2017, driven by the sale of a Scottish offshore wind farm for up to €650m to French utilities giant EDF. Photograph: Ben Curtis

Beinn an Tuirc wind farm, Scotland. Mainstream swung into a €487.5m profit last year from a €5m loss for 2017, driven by the sale of a Scottish offshore wind farm for up to €650m to French utilities giant EDF. Photograph: Ben Curtis

 

Mainstream Renewable Power, the emerging-markets-focused wind and solar energy group founded by Eddie O’Connor, is poised to field takeover bids from major oil groups next year after deciding to seek an equity investor to help fund is large development pipeline.

The company has begun the search for advisers to assess its business portfolio with a view to finding a partner “who shares Mainstream’s vision, values and sense of mission”, according to a company spokesman.

Industry sources said the move was likely to prompt takeover bids from big oil, offering Mr O’Connor, who owns 55 per cent of Mainstream, management and a group of high-net-worth individuals who have stuck with business since its establishment in 2008, a significant pay day.

It is not yet clear, however, whether the green energy entrepreneur and other legacy investors would be willing to exit at this stage.

Oil companies have been among the most aggressive pursuers of investments in renewable power firms and carbon neutral energy solutions in recent years as the world’s largest fossil fuel producers prepare for a transition to low-carbon energy.

Royal Dutch Shell, Total and BP have been among the most active dealmakers in this space in 2019.

Unprecedented growth

The search for a partner comes as the company is “undergoing a period of unprecedented growth and expansion across Africa, Asia Pacific, Latin America, as well as the offshore wind sector”, the spokesman said.

Last month, Mainstream raised $580 million (€522 million) of debt for key Chilean wind and solar projects under the company’s biggest financing deal. The funds are earmarked for 571MW of wind and solar farms currently under construction, which will be able to deliver power to 680,000 Chilean homes.

The projects are part of a wider 1,300MW Chilean platform that Mainstream is planning after the company won contracts in 2016, benefiting from power purchase agreements from the Latin American country’s government.

Mainstream has 1,500MW of projects in construction across Chile, Egypt, Senegal and South Africa and this is set to increase to 2.2GW “in the coming months”, the spokesman said.

‘Ambitious growth plan’

“We have a very ambitious growth plan, rapidly expanding our 9 gigawatt (9,000MW) global pipeline which will involve a multibillion dollar, multigigawatt construction programme,” he said. “We are looking for an equity partner at [the top company in the group] that wants to be part of this growth trajectory and that shares of vision our mission and our values.”

Mainstream, led by chief executive Andy Kinsella, swung into a €487.5 million profit last year from a €5 million loss for 2017, driven by the sale of a Scottish offshore wind farm for up to €650 million to French utilities giant EDF.

The deal allowed the company to repay all its debt and buy back shares and warrants held in the business by UK bank Barclays, Japanese trading house Marubeni and Australian financial group Macquarie.

The company also opened a temporary grey market for trading of its shares late last year at €9 a piece, representing a 300 per cent return on the original cost of the shares in 2008.

Mr Kinsella told The Irish Times in September last year that Mainstream would most likely be sold rather than go through an initial public offering (IPO).