BlackRock buys proof of regional renewables interest

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1915

Two major BlackRock investments in solar and wind power in South Korea support evidence that the Asia-Pacific is leading the world in renewable energy development and investment, said a Linklaters lawyer familiar with the deal.

BlackRock Real Asset, a subsidiary of US-based asset management firm BlackRock, has acquired an equity stake in South Korean solar developer Brite Energy Partners (BEP), with plans to provide more than USD100 million capital over time.

BlackRock also acquired a 100% stake in Korea Renewables Energy Development and Operations Holdings (Kredo), formerly IGIS Private Equity, for USD1 billion.

“We anticipate that the Asia-Pacific will continue to outperform other regions as a market for investment and development in renewable energy,” James McLaren, Linklaters’ Asia head of renewables based in in Hong Kong, told Asia Business Law Journal.

“Despite economic and other headwinds resulting from the covid-19 pandemic, investment in renewable energy in the Asia-Pacific has been remarkably resilient in the past 12 months,” said McLaren.

“In fact, the pace of development and investment continues to outstrip other parts of the world, supported by rising populations, robust economic growth and the greenfield nature of the renewables market in the region, and underpinned by some relatively attractive government support initiatives.”

The Linklaters team advising BlackRock in both transactions was led by Seoul-based energy and infrastructure partner Lee Joo-hee and Hong Kong-based corporate partner Alex Bidlake, supported by managing associates Tristan Kelly in Singapore and Angus Nunn in Hong Kong.

“The Korean government’s strong support for renewables, in particular offshore wind, continues with the revised renewable energy certificate (REC) multiplier table taking effect from July,” said Lee. “It has been motivating to see the government’s initiatives to streamline the regulatory landscape, including the permitting process, and to bring more transparency to the local participation scheme, both of which have been identified as challenges in developing large-scale offshore wind in Korea.

“There will be a presidential election in Korea next year, but the general public sentiment seems to be that government support for renewables will have to continue given the local and global requirements.”

BlackRock’s transactions were invested through its USD4.8 billion Global Renewable Power strategy, which invests in global climate infrastructure assets. KREDO is one of South Korea’s largest renewables developers, owning an advanced pipeline of offshore wind and other renewables assets amounting to more than 2GW in power generation capacity. BEP aims to use the capital to acquire and build more than 350MW of small-scale solar assets in South Korea.