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Saturday, 27th April 2024 |
| Deals of the Year 2022: Establishment of FuturEnergy Ireland a step for Ireland’s transition to a low carbon economy |
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| FutureEnergy Ireland, the joint venture between Coillte and ESB, aims to develop 1GW of onshore wind energy projects by 2030. The majority of FuturEnergy Ireland’s ambitious pipeline of projects are either preparing to enter the planning system or in the planning process awaiting adjudication. |
The winner of the Finance Dublin Deals of the Year Mergers & Acquisitions Joint Venture, Public Sector Deal of the Year is FuturEnergy Ireland. The joint venture, between two of Ireland’s commercial semi-state companies, Coillte and ESB, will undertake an estimated EUR1.5 billion project, developing 1 Giga Watt (GW) of wind energy projects by 2030 as part of Ireland’s Climate Action agenda. 1 GW of electricity is enough to power more than 500,000 homes.
On 30 November 2021, Coillte and ESB unveiled the new 50:50 joint venture company, FuturEnergy Ireland, joining forces to develop renewable energy in a major boost to Ireland’s goals to transition to a low carbon economy.
The structure of the JV company was developed to take into account the complex legal, corporate, commercial and regulatory aspects of both entities with preferred corporate structure requiring a restructuring of Coillte’s renewable assets within its business and hive-down of Coillte’s renewable energy and consulting business to a newly incorporated company pursuant to a share for undertaking exchange. This restructuring also included the reorganisation of Coillte’s renewable business, incorporation of various entities, and implementation of an intricate corporate JV structure that aligned with the preferred tax and financial structuring and intra-group transfers of shares to arrive at the preferred corporate structure. | | The Sliabh Bawn Wind Farm, Co Roscommon.The joint venture brings together the strengths of ESB and Coillte, owner of 7 per cent of Ireland's land area with 20 years experience in renewables. Coillte's portfolio of proposed wind farm projects and its Renewable Energy division has now transferred to FuturEnergy Ireland. |
The transaction was signed in November 2019 and the legal advisers on the transaction (McCann FitzGerald advised Coillte and A&L Goodbody advised ESB) worked with their clients to secure Competition and Consumer Protection Commission approval. This approval was achieved in February 2021 following an extensive two-phase investigation and included of the transaction, included developing, negotiating and advising upon appropriate ring-fencing structures. Ministerial consents were obtained in November 2021 with the transaction formally closing on 29th November 2021.
FuturEnergy Ireland aims to develop best-in-class, commercially successful onshore wind farms while maximising the support from local communities, with its actions expected to also help give rural areas an economic boost through increased investment, job creation and growth of a green industrial sector. The Climate Action Plan 2021 sets out a goal of up to 80% of electricity being generated from renewables by 2030 with onshore wind the predominant renewable technology to date.
The joint venture brings together the strengths of ESB and Coillte, owner of 7 per cent of Ireland’s land area with 20 years experience in renewables. Coillte’s portfolio of proposed wind farm projects and its Renewable Energy division has now transferred to FuturEnergy Ireland. The majority of projects in the pipeline are either preparing to enter the planning system or are in the planning process awaiting adjudication.  | | A&L Goodbody partner Deirdre Geraghty |
The new company is led by CEO Peter Lynch, former managing director of Coillte’s Renewable Energy Division who said “FuturEnergy Ireland and its two shareholders, Coillte and ESB, greatly appreciate Finance Dublin’s recognition of this pivotal joint venture deal. This is a hugely important transaction for Ireland given the steps required to reduce carbon emissions this decade. The new JV structure will materially support FuturEnergy Ireland’s ambition to generate 1GW of renewable electricity by 2030, which in turn will significantly contribute to the Government’s Climate Action Plan goals. Onshore wind has a key part to play in creating a low carbon economy and FuturEnergy Ireland expects to be at the forefront of this energy transition.”
A&L Goodbody LLP advised ESB on the deal with its team led by partners Richard Grey, Deirdre Hegarty and Richard Marron. “We were delighted to act for ESB on its strategic renewable energy joint venture with Coillte, FuturEnergy Ireland. FuturEnergy aims to deliver 1GW of renewable energy projects by 2030. This important joint venture will play a crucial role in helping Ireland to deliver on its green energy targets, achieving net zero emissions by 2050, and we wish it every success in its endeavours,” said Deirdre Geraghty and Richard Grey, Corporate and M&A partners at A&L Goodbody LLP.
McCann FitzGerald LLP advised Coillte on the transaction with the team led by partners Valerie Lawlor, Laura Treacy, Rory O’Malley, Donal O Raghallaigh, Stephen Fuller and consultant Catherine Austin. | | McCann FitzGerald partner Valerie Lawlor |
Valerie Lawlor, Partner, McCann FitzGerald said “Much time was spent on considering and mapping out an appropriate structure for the deal. This involved a restructuring of Coillte’s renewable assets, reorganisation of Coillte’s renewable business, incorporation of various entities, and implementation of an intricate corporate JV structure that aligned with the preferred tax and financial structuring and intra-group transfers of shares to arrive at the preferred corporate structure.
Steering the deal through the various regulatory hurdles to get to completion was equally complex, demanding and time-consuming for all of the parties involved. As mentioned, the deal required Competition and Consumer Protection Commission approval, which required an extensive two-phase investigation, followed by a requirement to obtain Ministerial consent, which required extensive engagement with the parties’ respective shareholders and NewERA.
Ultimately, this effort was worth it as FuturEnergy Ireland now has a strong mandate from its stakeholders and is well positioned to make a lasting and positive impact in Ireland’s renewable energy sector by delivering wind farm infrastructure for the benefit of all stakeholders, including local host communities.”
Lawlor added “The deal reaffirms the commitment of these commercial semi-state entities to respond innovatively to the challenges of climate change. As mentioned, FuturEnergy Ireland and its shareholders now have a strong mandate from Coillte, ESB and their respective stakeholders and is well positioned to make a lasting and positive impact in Ireland’s renewable energy sector by delivering wind farm infrastructure for the benefit of Ireland as a whole.”
Other advisers on the deal included IBI Corporate Finance (Corporate Finance Advisers to Coillte) and KPMG (Corporate Finance and Tax Advisers to ESB).
Laurence O’Shaughnessy, IBI Managing Director and Head of Energy and Real Assets, said “FuturEnergy Ireland is an innovative joint venture between two of Ireland’s largest semi-state commercial companies, which has a key role to play in enabling Ireland’s energy transition to 2030 by delivering in excess of 1 GW onshore wind energy in Ireland. IBI is delighted to have helped Coillte with the formation of its FuturEnergy Ireland joint venture with ESB.’ |
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