Marubeni eyes 25pc stake in Irish clean-tech player Mainstream, with €100m funding

6 Aug 2013

Mainstream Renewable Power CEO Eddie O'Connor, in Cape Town, South Africa, with guests at start of the construction of the Jeffreys Bay Wind Farm. Construction of the wind farm began in January 2013

Mainstream Renewable Power, the Irish-born wind and solar developer, has forged a deal with the long-standing Japanese trading company Marubeni Corp. The move will see Marubeni inject a €100m equity investment in Mainstream, netting a possible 25pc holding in the global clean-tech firm as a result.

The deal between Marubeni and Mainstream, which was set up by Airtricity pioneer Eddie O’Connor, as announced yesterday.

Subject to shareholder approval, the deal with Marubeni will spell the largest single equity investment in Mainstream since the company was spawned almost six years ago.

Neart na Gaoithe (Gaelic for ‘strength of the wind’)

O’Connor turned his renewable energy eye to Mainstream in 2008 following the sale of Airtricity (now owned by SSE Renewables). Mainstream’s remit is to develop builds and operates wind and solar projects.

Just this past June, the company inked a joint venture with the investor Actis for a US$1.4bn project to bring 600 megawatts (MW) of wind and solar farms to market in Chile by 2016.

Spreading the clean-tech wave globally: wind and solar

Since its fruition in 2008, led by O’Connor, Mainstream has built a global pipeline of more than 19,000 megawatts of wind and solar projects across four continents, with plants currently in construction and operation in Ireland, South Africa, Chile and Canada.

Mainstream also recently forged strategic announcements; including the receipt of onshore planning consent for its 450MW offshore wind farm in Scotland.

On Irish soil, O’Connor is vying to capitalise on the new East-West Interconnector connecting Ireland with the UK, the goal of which is to help ensue more energy security for Ireland and to allow for electricity trading between both the island of Ireland and the island of Great Britain.

Earlier this year, Mainstream received a grid connection from National Grid in the UK for its Energy Bridge project. The goal of this project is to enable Mainstream build and export 5,000MW of wind energy from Ireland to the UK starting in 2018.

In an interview with earlier this year, O’Connor spoke about his vision to create a supply chain manufacturing hub for the wind-energy sector in the midlands region of Ireland in order to spawn new jobs and new spin-off industries, especially in the manufacturing space.

Representatives from some 30 wind-turbine companies and manufacturers of transmission technologies, including XEMC Darwind, General Electric, Alstom, Siemens, ABB, LM Wind Power and Goldwind exhibited their technologies at an event in Tullamore, Co Offaly, which O’Connor and Mainstream hosted in June.

‘Strategic business alliance’ – O’Connor

Under the Japanese deal announced yesterday, Marubeni will glean the right to representation on the Mainstream board of directors alongside Barclays, which invested in the company in 2008.

According to Mainstream, the agreement signifies a long-term strategic alliance for both companies, which will see them working closely together to accelerate Mainstream’s key projects across multiple jurisdictions.

Marubeni Corp already has business interests in the renewables sector globally, including the offshore wind industry in Europe and the electricity supply business in the UK.

Commenting on the deal with Marubeni, O’Connor said the Japanese trading player’s strategic mission and values are “closely aligned” to Mainstream’s business goals.

He said the Marubeni investment would be a “game changer” for Mainstream, allowing the Irish company to focus on speeding up its project portfolios across a range of markets. He said the investment would also help Mainstream enter new strategic jurisdictions that could present what he described as “strong value opportunities” for Mainstream.

“Having grown our company in the midst of the global financial crises, this type of long-term strategic investment is true testament to the strength and experience of our team, as well as the quality and spread of our global project portfolio,” explained O’Connor.

Hiroshi Tachigami, president of Marubeni Europower based in London, said the Japanese firm is “delighted to seize the opportunity with the right company at the right time in the global renewable energy businesses”.

“This is a strong partnership as Mainstream and Marubeni see our future overlap in many areas. We are excited to work together complementing each other in where we need, including entry into new market territories, delivery of pre-consenting projects, structuring capital solutions, all of which are vital in accelerating the growth of Mainstream and Marubeni Power,” he said.

The work of Mainstream and Marubeni

Mainstream is currently constructing solar and wind farms across Ireland, Chile, Canada, and South Africa.

On European soil, it is developing just under 8GW of offshore wind projects in England, Scotland and Germany, with 4.45GW of secured grid connection for these offshore projects.

Mainstream employs more than 160 experienced staff across four continents. As well as in Dublin, it has offices in Berlin, Cape Town, Chicago, Glasgow, Johannesburg, London, Santiago and Toronto.

Marubeni is one of the five largest Japanese trading companies. Its activities spill into manifold business areas, including food products, materials, chemicals, energy, metals and mineral resources, transportation machinery.

Marubeni entered into the Independent Power Producer (IPP) business in 1992. Apparently, it holds a global power asset portfolio of about 10,000MW worldwide.  

In the European renewable sector, Marubeni has expanded its presence by taking an equity stake in the Gunfleet Sands (UK) offshore wind farm in 2011, and acquiring Seajacks International in 2012.

Carmel Doyle was a long-time reporter with Silicon Republic