Power Technology

Daily Newsletter

11 August 2023

Daily Newsletter

Sandbrook and partners to acquire German energy company NeXtWind

Sandbrook and its partners have committed to investing $750m to support NeXtWind’s strategy.

US private investor Sandbrook Capital has agreed to acquire German renewable energy developer NeXtWind in partnership with the Public Sector Pension Investment Board (PSP Investments) and the Investment Management Corporation of Ontario (IMCO).

NeXtWind is being acquired from a syndicate led by Crestline Investors in a deal in which investors will provide $750m for its existing portfolio of operating wind assets and to fund future growth.

Led by founders Ewald Woste, Werner Süss and Lars Meyer, NeXtWind is well-positioned to execute its strategy of acquiring and repowering wind farms and to become a leader in the renewable energy market in Germany and beyond.

Germany has the largest share of onshore wind in Europe, with 58GW of installed capacity by the end of 2023 and capacity for further growth. Around 30% of its current onshore wind facilities have been in service for more than 15 years.

Sandbrook Capital co-founder and partner Ken Ryan stated: “We are thrilled to partner with the NeXtWind management team as well as PSP Investments and IMCO to grow this platform in Germany.

“We have been looking to enter this space for several years and are confident we have the right team and capital base to become a leading player in the German renewables market.”

NeXtWind co-founder Ewald Woste stated: “We have been focused on the repowering opportunity in Germany for over six years now. With this newly announced acquisition and partnership, we have the capital to match our business development and operational expertise and grow the amount of renewable energy produced from older wind sites, helping the energy transition and also increasing Germany’s energy security.”

ESG 2.0 marks a shift towards stricter environmental rules

ESG is moving into a different era, which we call ESG 2.0. While ESG 1.0 was driven by voluntary corporate action, spurred by pressure from activist consumers and investors, ESG 2.0 is being driven by a new wave of government policies. The EU has taken the regulatory lead, with rules introduced or in the pipeline that will price emissions, regulate the use of the terms ‘ESG’ and ‘sustainability’ in marketing materials, and make ESG reporting mandatory. The US has taken a different approach, favoring less regulation and more financial support in the form of tax breaks for clean industry (renewables plus nuclear and hydrogen). China is planning to expand its emissions trading system to more sectors, decarbonize its heavy industry, and ramp up its use of renewables. The new policy direction is mainly motivated by the ambition to hit net zero emissions targets. But on top of this, governments are now competing for clean industry and trying to challenge China’s leadership on the production of the world’s green technologies such as solar panels and batteries, as well as the production and refinement of materials needed for energy transition such as lithium. These driving forces are leading to policy that will impact every sector, not just heavy industry, and will keep ESG near the top of the regulatory agenda over the longer term.