Target Information

Apollo (NYSE: APO) has announced an agreement to invest up to £4.5 billion in fixed-rate callable notes issued by Électricité de France (EDF) as part of its €50 billion Euro Medium Term Note (EMTN) program. The funds generated from this financing will be primarily allocated to support EDF's projects in the United Kingdom, with a particular focus on the Hinkley Point C nuclear power station. This transaction stands out as one of the most significant sterling-denominated note issuances on record.

Jamshid Ehsani, Apollo Partner, commented on this landmark agreement, stating that Apollo is pleased to provide large-scale financing to EDF, recognizing its crucial role in enhancing European energy sovereignty and developing power infrastructure, particularly in the UK.

Industry Overview in the UK

The United Kingdom has been undergoing a major transformation in its energy sector, with a strong focus on sustainability and renewable energy initiatives. The government has set ambitious targets to reduce carbon emissions and increase the share of renewable energy sources in its energy mix. This shift has resulted in a growing demand for innovative financing solutions to support significant infrastructure projects such as nuclear power generation.

Nuclear power remains a vital part of the UK energy strategy, particularly as the country works to phase out coal and invest more in low-carbon technologies. Hinkley Point C, as one of the UK's largest nuclear projects, plays a pivotal role in ensuring energy security and transitioning towards a sustainable future.

Government policies and support mechanisms, including the Contracts for Difference (CfD) scheme, have been designed to encourage private investments in the energy sector. This regulatory framework aims to create a stable investment climate, attracting both domestic and foreign investors to participate in the UK's energy transition.

The ongoing transformation of the UK's energy landscape, combined with initiatives toward enhancing energy independence, presents numerous opportunities for investors looking to capitalize on innovative financing solutions in the sector.

Rationale Behind the Deal

This investment by Apollo serves multiple strategic purposes. Firstly, it underscores the strong partnership between Apollo and EDF, indicating their shared commitment to advancing the energy sector in Europe, particularly in support of key projects like Hinkley Point C. Secondly, the deal highlights Apollo's proactive approach to investing in essential infrastructure that underpins energy security and contributes to sustainable development.

Moreover, this investment aligns with Apollo's broader strategy of providing bespoke capital solutions to leading companies across Europe, reflecting its confidence in the growth and stability of the UK energy market.

Investor Information

Apollo is a prominent global alternative asset manager with a strong emphasis on delivering innovative investment solutions across various asset classes. With over 30 years of experience, Apollo seeks to offer clients superior returns while addressing their financial needs and supporting businesses through tailor-made capital solutions.

As of March 31, 2025, Apollo manages approximately $785 billion in assets, showcasing its capacity for large-scale investments. The firm has a history of successfully investing in significant European enterprises, having entrusted €2.5 billion in High-Grade Capital Solutions to Air France-KLM in recent transactions.

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This transaction between Apollo and EDF presents a compelling investment opportunity, primarily due to its scale and the strategic significance of the Hinkley Point C project within the UK's energy framework. Investing in nuclear power infrastructure not only fortifies the nation's energy security but also aligns with global trends toward low-carbon energy production.

Apollo’s extensive experience in the European market coupled with its established relationship with EDF positions the firm as a knowledgeable investor capable of navigating the complexities of large infrastructure projects. The financial backing provided through this deal is likely to solidify long-term returns while meeting regulatory standards in alignment with the UK’s energy transition goals.

However, potential investors should remain aware of the challenges that accompany nuclear power projects, including regulatory hurdles and public opinion dynamics. As the energy sector evolves, the significance of risk management and adaptive strategies cannot be overstated, making it critical for Apollo to leverage its expertise as it engages with stakeholders throughout the lifespan of the project.

In conclusion, the investment not only represents a strategic financial commitment but also illustrates a forward-thinking approach towards clean energy solutions, standing to influence both Apollo’s portfolio diversification and the overall landscape of energy investment in the UK.

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