Posted on August 3, 2022
Longroad Energy Holdings, LLC (“Longroad”) announced today a $500 million equity investment by MEAG, acting as asset management arm for entities of Munich Re, alongside two of the company’s existing investors, the NZ Super Fund and Infratil, a listed entity managed by Morrison & Co. The investment will support Longroad’s strategic shift from a primarily “develop to sell” business model to one that is more oriented towards ownership, and will accelerate the expansion of its current 1.5 GW portfolio of owned assets, to 8.5 GW of wind, solar, and storage projects over the next five years.
“This important infusion provides Longroad with the capital to rapidly transition to a strategy biased to asset ownership. It also will fuel our acquisition goals and continue to support our investments in adjacent sectors, as we did recently with Valta Energy in the DG space,” said Paul Gaynor, CEO of Longroad. “We are thrilled to have MEAG join with our existing investors to power our robust growth plans, and we appreciate their collective support as we make strides in implementing our ambitious near-term objectives.”
Dr. Alexander Poll, MEAG’s Senior Investment Manager responsible for U.S. infrastructure investments: “This investment is a significant step to further increase the U.S. renewable portfolio for Munich Re. Given Munich Re’s strong position in the U.S. insurance market, we are interested in further investing in the United States.” Martin Kaufmann, Senior Investment Manager MEAG U.S. infrastructure investments: “This investment makes an important contribution to Munich Re’s net-zero climate commitment under the Net-Zero Asset Owner Alliance (AOA), which Munich Re joined in 2020. We are also pleased to have teamed up with professional partners on this investment to build a successful long-term relationship.”
NZ Super Fund Head of External Investments and Partnerships Del Hart said: “Longroad has been one of the NZ Super Fund’s most successful investments and, in line with our long-term, partnership approach to infrastructure development, we are pleased to both welcome MEAG as a co-investor and contribute more capital ourselves. It has been exciting to see Longroad grow since we first invested in 2016 and we look forward to seeing it continue to deliver both strong financial returns and positive environmental and social outcomes.”
“Infratil is extremely happy with this outcome,” said Jason Boyes, CEO of Infratil. “We remain very optimistic about the opportunities and outlook for Longroad. It is well-positioned in a key geography, with high-quality operating assets, built-in growth through its development portfolio, and a proven team. The new investment from a leading global infrastructure investor in MEAG is a strong endorsement of the business and the sector.”
Positioned for Growth
High Value Pipeline
In addition to its 1.5 GW net ownership operating portfolio, Longroad’s track record includes 3.2 GW of developed and acquired projects. Longroad has a substantial development pipeline of ~15 GW of wind, solar and storage projects across 13 states, including in key growth markets such as Arizona, California, Hawaii, Maine, and Utah:
- Arizona – Operating and development portfolio of nearly 4 GW of solar and storage
- California – Operating and development portfolio of over 3 GW of solar and storage
- Hawaii – Development pipeline of over 500 MW of solar and storage
- Maine – Development pipeline of over 1 GW of wind, solar and storage
- Utah – Operating 306 MW of wind assets, with a development pipeline of over 2 GW of wind, solar and storage
Procurement Strategy
In support of its pipeline development, Longroad has established a deep relationship with First Solar and has recently signed a multi-year contract with Powin Energy, affording favorable procurement status and supply chain benefits. Longroad is currently contracted with First Solar for nearly 4 GW of panel supply through 2026, as well as with Powin to procure up to 4.5 GWh of storage through 2025.
Longroad’s financial advisors on the transaction included lead advisor Goldman Sachs & Co., as well as KeyBanc Capital Markets and Lazard Frères & Co. LLC. Morgan Lewis served as legal counsel. Barclays served as MEAG’s financial advisor, and Holland & Knight as its legal counsel.
About Longroad Energy Holdings, LLC
Founded in 2016, Longroad Energy Holdings, LLC is focused on wind, solar, and storage project development, operating assets, and services. Today, Longroad owns 1.5 GW of wind and solar projects across the United States and operates and manages a total of 3.5 GW of wind and solar projects on behalf of Longroad and third parties. Upon this transaction closing, Longroad will be owned by the NZ Super Fund, Infratil Limited, MEAG, and Longroad Energy Partners, LLC.
Longroad adheres to robust ESG operating principles, and intends to broaden its commitments to socially responsible business practices, carbon reduction, environmental sustainability and diversity, equity, and inclusion (DEI) practices. Longroad will continue to prioritize partners who follow similar business practices and will encourage deeper ESG commitments.
www.longroadenergy.com
Twitter: @LongroadTweet
LinkedIn: Longroad Energy
About MEAG
MEAG manages the assets of Munich Re and ERGO. It has representations in Europe, Asia and North America and offers its extensive know-how to institutional and private customers. MEAG currently manages assets to the value of around € 330 billion, around € 60 billion of which in its business with institutional investors and private customers.
MEAG invests in alternative assets in North America on behalf of Munich Re group and other non-US institutional investors. MEAG’s most recent infrastructure investments in the U.S. comprise 400 MW of solar farms and battery storage in California in 2021, various regulated U.S. water assets in 2020, as well as New York’s Astoria Energy Partners and Long Beach Container Terminal in 2019.
