Information on the Target

Infracapital Greenfield Partners I LP (‘the Fund’) is set to acquire a majority stake in a portfolio of eleven Combined Heat and Power (‘CHP’) projects in Italy from Enel X. This portfolio features projects that are either operational or under construction, totaling a power capacity of 27.5 MW. Additionally, the joint venture (JV) has a robust development pipeline, with potential projects expected to yield over 20 MW annually.

The JV aims to enhance its capabilities by engaging in ancillary services such as demand response to the grid, optimizing the current CHP infrastructure. Moreover, it intends to explore growth opportunities in non-traditional energy sectors, which include alternative energy efficiency technologies, distributed generation, energy storage, and electric vehicle (EV) charging infrastructure.

Industry Overview in Italy

The energy sector in Italy is experiencing significant transformations, driven by the country's commitment to sustainability and reducing carbon emissions. The Italian government has implemented extensive policies and incentives for the development of renewable energy sources, particularly focusing on wind, solar, and biomass energy. As a result, the penetration of renewable technologies in the energy mix has substantially increased, positioning Italy as a leader in Europe’s energy transition.

In recent years, Combined Heat and Power (CHP) systems have gained traction due to their efficiency in generating electricity and thermal energy simultaneously. This technology is particularly valuable in urban settings where energy demand is high and contributes significantly to overall energy savings and emissions reduction.

Moreover, Italy's geography, with its diverse climate and industrial footprint, presents ample opportunities for innovative energy solutions. The growth of decentralized energy generation, combined with advancements in digital and smart energy management systems, is reshaping the landscape of the Italian energy market.

With the rise of energy efficiency initiatives, the market is also witnessing an increase in alternative energy technologies, thus creating a favorable ecosystem for investments in CHP projects. The collaborative approach to energy management not only supports financial returns but aligns with national energy goals and regulatory frameworks aimed at achieving climate neutrality.

The Rationale Behind the Deal

This acquisition aligns with Infracapital's strategy to focus on later-stage development, construction, and expansion within European infrastructure, aiming to capitalize on the growing demand for reliable and sustainable energy solutions. By partnering with Enel X, the Fund benefits from its extensive expertise and established presence in Italy’s energy efficiency market.

Furthermore, this joint initiative is poised to harness the full potential of the identified development pipeline, allowing the JV to tap into new investment opportunities and enhance overall project value while addressing market needs.

Information About the Investor

Infracapital is a leading infrastructure investment manager dedicated to investing in the development of sustainable energy and infrastructure projects. The Fund has successfully executed numerous transactions across Europe, displaying a strong commitment to supporting initiatives that yield long-term value both for investors and the community.

Enel X, the other partner in this JV, is a segment of Enel Group focusing on innovation and digital solutions across various energy sectors. With a robust portfolio and significant influence in the global energy market, Enel X is keen to foster growth in sustainable energy initiatives, making it an ideal partner for Infracapital.

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This acquisition represents a strategic investment for Infracapital, particularly given the robust infrastructure and regulatory support for CHP projects in Italy. By acquiring this portfolio, the Fund not only diversifies its investment but also strengthens its foothold in the rapidly evolving energy market.

Overall, the deal showcases great potential for long-term returns. The focus on efficient energy production, combined with the expected future projects, positions the JV for success in capturing market opportunities and enhancing the value of the investment.

Moreover, with an experienced partner like Enel X onboard, the JV is likely to benefit from innovative strategies and insights that could accelerate growth and operational efficiency. This collaboration with Enel, with its solid market presence and expertise, adds further credibility to the investment.

Given these factors, the investment is deemed favorable, aligning with broader energy trends and governmental policies while also presenting avenues for substantial growth in a sustainable manner.

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