Actis, a leading global investor in sustainable infrastructure, has announced the signing of definitive transaction documents for the acquisition of a controlling stake in Yellow Door Energy Limited (“Yellow Door Energy”, or “YDE”).
Yellow Door Energy is the leading distributed Commercial & Industrial (“C&I”) solar platform in the Middle East and Africa (“MEA”) region with around 200MW of secured production capacity. Closing of the transaction remains subject to obtaining the relevant regulatory approvals.
In all its target markets, YDE can offer customers a power supply that is more economical and sustainable than the grid. Demonstrating 10-50% power cost savings for customers, the company is positioned in the fast-growing C&I segment, in key MEA markets. YDE has one of few operating C&I portfolios of scale in the region with 106MW in operation and 104MW awarded and under construction. The company has key existing relationships with a large customer base of over 50 companies, including sought after blue-chip businesses such as Nestlé, Majid Al Futtaim, DHL, Mondelez and Unilever.
Energy supply in the Middle East is heavily dependent on fossil fuels (>90%). Renewable technology deployment is a key enabler for businesses to achieve low carbon transition strategies, and with this latest investment Actis continues its mission to advance a low carbon transition. The transaction will be funded through Actis’ Energy 5 Fund, Actis’ latest energy fund with US$6 billion of investable capital to accelerate the Energy Transition globally. Actis will apply its successful buy-and-build power strategy to scale the business and accelerate growth. The team has invested in over 70 renewable energy projects to date, generating approximately 11GW of renewable energy globally.
"Lucy Heintz, Partner and Head of Energy Infrastructure at Actis, commented: “We’re delighted to be contributing to the Middle East and Africa region’s transition away from fossil fuels by deploying new Solar PV technology, presenting an exciting opportunity to scale the business, and where we see a clear opportunity and large addressable market. Our strategy is to build the business into the region’s distributed solar sustainability leader.”
Shami Nissan, Partner and Head of Sustainability at Actis, added: “We are very happy about our partnership with Yellow Door Energy which is helping customers across MEA transition to Net Zero and reduce fossil fuel emissions. Actis is a signatory to the Net Zero Asset Managers Initiative which supports the goal of Net Zero emissions by 2050 and we recently announced our own portfolio-wide 2050 Net Zero target. We feel uniquely positioned to help Yellow Door Energy continue its growth journey across the Middle East and Africa region.”
Jeremy Crane, Founder and CEO of Yellow Door Energy, said: “This investment from Actis, complemented by increased investments from our current shareholders, Mitsui & Co., Ltd., APICORP, and IFC, is an attestation to the success of our company. I look forward to continuing our mission to provide clean, affordable, and reliable energy to businesses in the MEA region. As a result, our customers will become more successful, create more jobs and contribute to their local communities. This investment will enable us to scale geographically through both direct and M&A activities.”
Yosuke Matsumoto, GM of New Downstream Business Div. Mitsui & Co., Ltd., said: “We are delighted to see Yellow Door Energy’s growth and contribution to the region’s green energy among the C&I sector, since our participation. We welcome the participation by Actis and believe this partnership will further accelerate the growth of Yellow Door Energy. Mitsui is committed to developing and promoting technologies and new business that reduces environmental impact and will continue to contribute to Yellow Door Energy.”
Khalid Ali Al-Ruwaigh, CEO of APICORP, said: “As one of our earliest equity investments in the renewable energy space, Yellow Door Energy has demonstrated strong business growth over the past few years thanks to its strong leadership team and commitment towards innovation and advancing the Energy Transition. We believe having a reputable partner such as Actis will propel the company to the next stage of its growth. The additional backing is especially relevant today considering the growing urgency to meet decarbonisation goals and bolster the sustainability of the regional energy landscape.”
Lance Crist, IFC’s Global Head of Infrastructure Equity, said: “Our early investment in Yellow Door Energy is part of IFC’s global strategy of working with early-stage companies and promoting affordable, reliable and clean energy in emerging markets. We are proud to be a partner in Yellow Door Energy’s successful evolution as the company continues to grow from its home base of UAE and expand its footprint across the Middle East, Africa and other regions. We look forward to supporting their further growth as a leader in bringing clean energy technology to their customers throughout the region.”
Actis has recently successfully realised three major energy investments in Latin America – the largest independent renewable energy platform in Brazil, the largest renewable energy IPP (independent power provider) in Chile and a leading IPP in Mexico. In April, Actis announced the signing of an agreement to sell Sprng Energy, one of India’s largest renewable energy companies and most recently announced the launch of a power generation business dedicated to delivering an equitable Energy Transition in Southeast Asia, an investment in Omega Energia, the largest publicly listed pure-play renewable energy generation company in Latin America, and the launch of a Central and South Eastern Europe renewables platform.
Actis were advised by HSBC as sole financial advisor and Clifford Chance as international legal counsel on this transaction. Yellow Door Energy were advised by Cantor Fitzgerald as sole financial advisor and White & Case as international legal counsel. Dentons acted as international legal counsel to Mitsui & Co.,Ltd., IFC and APICORP (in their respective capacities as shareholders).