As part of the agreement, EnCap and its co-investors alongside Apollo Funds have committed an investment of up to $400m in Broad Reach Power
Broad Reach Power to secure an investment of up to $400m from Apollo, EnCap, and others. (Credit: seagul from Pixabay)
Funds managed by affiliates of Apollo (Apollo Funds) have agreed to acquire a stake of 50% in US-based power producer Broad Reach Power from EnCap Investments, Yorktown Partners, and Mercuria Energy.
The consideration to be paid for the acquisition has not been disclosed by the parties. However, EnCap and its co-investors alongside Apollo Funds have committed an investment of up to $400m in Broad Reach Power.
The additional equity is expected to finance Broad Reach Power’s continued expansion as well as growth pipeline.
EnCap, Yorktown Partners, and Mercuria Energy will retain the remaining 50% stake in the company.
Apollo senior partner and infrastructure co-head Geoff Strong said: “At Apollo we have been highly active in the energy transition, and we are thrilled to join EnCap in this investment in Broad Reach, which in our view is the premier energy storage leader in the US.
“Broad Reach has a scaled, high-performing platform that is well positioned for strong continued growth, particularly as the shift to more intermittent clean energy increases volatility and drives demand for energy storage.”
Based in Houston, Broad Reach Power is a utility-scale energy storage and renewable energy platform. The company has a portfolio of 21GW of wind, solar, and energy storage power projects in the US.
It has over 1.4GWh of storage assets that are either in operation or under construction. These include the North Fork and Bat Cave battery storage projects in Texas that began operations earlier this month.
Both North Fork and Bat Cave have a capacity of 100MW/100MWh.
Broad Reach Power was established in 2019 by EnCap’s energy transition platform. The transaction with Apollo Funds marks the first sale by EnCap’s $1.2bn Energy Transition Fund I.
EnCap energy transition managing partner Shawn Cumberland said: “Broad Reach has emerged as a disruptor in the dramatic transformation of the US electricity sector. We believe this transaction both validates the value created by EnCap’s sponsorship of Broad Reach and allows us to continue to participate in its dominant position in the market.
“Apollo is a sophisticated and experienced energy transition and power industry investor and will be an extremely valuable member in the expanded partnership to accelerate Broad Reach’s growth.”
The deal, which is subject to customary closing conditions, is anticipated to be wrapped up by the year-end.