Information on the Target

ENGIE North America has announced a significant partnership with funds managed by CBRE Investment Management to collaborate on a portfolio of battery storage assets located in Texas and California. This agreement reflects one of ENGIE’s most substantial operating portfolio partnerships in the United States and is recognized as one of the largest transactions completed in the battery storage sector to date. ENGIE will maintain a controlling interest in these assets while continuing to manage their operations.

The portfolio encompasses a total of 2.4 gigawatts (GW) and includes 31 operational projects situated across the Electric Reliability Council of Texas (ERCOT) and California Independent System Operator (CAISO) jurisdictions. This collaboration underscores ENGIE's commitment to meeting the rising energy demands in these key markets.

Industry Overview in the Target's Specific Country

The battery storage industry in the United States has experienced remarkable growth, driven by the increasing demand for renewable energy and the need for reliable energy storage solutions. In states like Texas and California, the reliance on renewable energy sources has surged, necessitating efficient energy storage to manage the intermittent nature of these resources. The ERCOT and CAISO regions are at the forefront of this transformation, showcasing the importance of storage facilities in ensuring grid stability.

Texas, in particular, has become a leader in renewable energy production, utilizing its extensive land availability and strong wind and solar resources. As a result, the state has seen a proliferation of battery storage projects to enhance grid reliability during peak demand periods. California, on the other hand, has mandated ambitious renewable energy goals, further propelling the need for comprehensive energy storage solutions to mitigate supply-demand discrepancies.

Both states have established themselves as pioneers in integrating energy storage into their respective energy infrastructures, attracting significant investment and innovation. Battery storage assets have been recognized as critical components in achieving carbon neutrality and advancing the dual objectives of decarbonization and digitalization within the energy sector.

The United States battery storage industry is expected to continue its upward trajectory, supported by federal policies and incentives that favor investments in clean energy technologies. As a result, companies like ENGIE, which are strategically positioned in these key markets, are well-poised to capitalize on future opportunities.

The Rationale Behind the Deal

This partnership aligns with ENGIE's strategic objectives to enhance its footprint in the North American renewable energy market while simultaneously recycling capital. By collaborating with CBRE Investment Management, ENGIE not only gains a prominent, globally recognized investor but also reinforces its commitment to expanding battery storage assets, which are vital for meeting increasing energy demands across Texas and California.

The successful integration of battery storage solutions is crucial in addressing the challenges associated with renewable energy integration, such as peak demand management and grid resilience. This transaction serves to strengthen ENGIE's operational capabilities and establishes a robust infrastructure capable of supporting future energy requirements.

Information About the Investor

CBRE Investment Management is a renowned global real assets investment firm, managing $149.1 billion in assets as of March 31, 2025. Operating in 20 countries worldwide, CBRE IM adopts an investor-operator approach, focusing on delivering sustainable investment solutions across various real asset categories. Their expertise in real assets, combined with a commitment to sustainability, positions them as a strong partner for ENGIE in this strategic venture.

As an affiliate of CBRE Group, Inc., the world's largest commercial real estate services and investment firm, CBRE IM leverages extensive market insights and resources to maximize investment performance for its clients. Their participation in this battery storage transaction signifies confidence in ENGIE’s proven track record of managing and financing renewable assets and supports their overarching goal of facilitating sustainable infrastructure development.

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This partnership between ENGIE North America and CBRE Investment Management appears to be a strategically sound investment for both parties. Given the growing demand for battery storage solutions in North America, particularly in the ERCOT and CAISO markets, this collaboration positions ENGIE to capitalize on future growth opportunities while allowing CBRE IM to diversify its investment portfolio into the burgeoning energy storage sector.

The retention of a controlling interest by ENGIE ensures that the company can leverage its extensive operational expertise in managing the assets, thus fostering confidence among stakeholders regarding the project's future viability. Moreover, the substantial 2.4 GW capacity of the portfolio underscores the scale and significance of the investment in addressing critical energy needs.

Furthermore, the venture aligns well with broader macro trends, such as decarbonization and digitalization, that are increasingly shaping the energy landscape. As the industry evolves, investments like these can potentially yield impressive returns while also contributing to a more sustainable energy future.

Overall, this deal signifies a promising step forward for ENGIE and CBRE IM, reinforcing their commitments to leading the charge in energy transition and sustainable investments. If the necessary infrastructure and regulatory frameworks continue to evolve favorably, this collaboration could indeed prove to be a substantial and fruitful investment.

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