Longroad Energy Holdings LLC has received a $500 million equity investment by MEAG, acting as asset management arm for entities of Munich Re, alongside two of the company’s existing investors, the NZ Super Fund and Infratil, a listed entity managed by Morrison & Co.
The investment will support Longroad’s strategic shift from a primarily “develop to sell” business model to one that is more oriented towards ownership. It will accelerate the expansion of its current 1.5 GW portfolio of owned assets to 8.5 GW of wind, solar and storage projects over the next five years.
“This important infusion provides Longroad with the capital to rapidly transition to a strategy biased to asset ownership. It also will fuel our acquisition goals and continue to support our investments in adjacent sectors, as we did recently with Valta Energy in the DG space,” says Paul Gaynor, CEO of Longroad. “We are thrilled to have MEAG join with our existing investors to power our robust growth plans, and we appreciate their collective support as we make strides in implementing our ambitious near-term objectives.”
“This investment is a significant step to further increase the U.S. renewable portfolio for Munich Re,” comments Dr. Alexander Poll, MEAG’s senior investment manager responsible for U.S. infrastructure investments. “Given Munich Re’s strong position in the U.S. insurance market, we are interested in further investing in the United States.”
“This investment makes an important contribution to Munich Re’s net-zero climate commitment under the Net-Zero Asset Owner Alliance (AOA), which Munich Re joined in 2020,” mentions Martin Kaufmann, senior investment manager at MEAG’s U.S. infrastructure investments. “We are also pleased to have teamed up with professional partners on this investment to build a successful long-term relationship.”
“Longroad has been one of the NZ Super Fund’s most successful investments and, in line with our long-term, partnership approach to infrastructure development, we are pleased to both welcome MEAG as a co-investor and contribute more capital ourselves,” adds Del Hart, NZ Super Fund’s head of external investments and partnerships. “It has been exciting to see Longroad grow since we first invested in 2016 and we look forward to seeing it continue to deliver both strong financial returns and positive environmental and social outcomes.”
“Infratil is extremely happy with this outcome,” says Jason Boyes, CEO of Infratil. “We remain very optimistic about the opportunities and outlook for Longroad. It is well-positioned in a key geography, with high-quality operating assets, built-in growth through its development portfolio and a proven team. The new investment from a leading global infrastructure investor in MEAG is a strong endorsement of the business and the sector.”
In addition to its 1.5 GW net ownership operating portfolio, Longroad’s track record includes 3.2 GW of developed and acquired projects. Longroad has a substantial development pipeline of ~15 GW of wind, solar and storage projects across 13 states, including in key growth markets. In Arizona and California, the company is operating and development portfolio of nearly 4 GW and over 3 GW of solar and storage, respectively. The company has a development pipeline of over 500 MW of solar and storage in Hawaii. In Maine, there is a development pipeline of over 1 GW of wind, solar and storage. Longroad operates 306 MW of wind assets, with a development pipeline of over 2 GW of wind, solar and storage in Utah.
In support of its pipeline development, Longroad has established a deep relationship with First Solar and has recently signed a multi-year contract with Powin Energy, affording favorable procurement status and supply chain benefits. Longroad is currently contracted with First Solar for nearly 4 GW of panel supply through 2026, as well as with Powin to procure up to 4.5 GWh of storage through 2025.
Longroad’s financial advisors on the transaction included lead advisor Goldman Sachs & Co., as well as KeyBanc Capital Markets and Lazard Frères & Co. LLC. Morgan Lewis served as legal counsel. Barclays served as MEAG’s financial advisor, and Holland & Knight as its legal counsel.