According to Bloomberg’s (NEF) Energy Transition Investment Trends 2022 report, global energy transition investments totalled $755 billion in 2021 (up 27% from 2020) – a new record – thanks to growing climate ambition and policy measures taken by countries around the world. With the sole exception of CO2 capture and storage (CCS), they have progressed in all areas: renewable energy, storage, electric mobility, nuclear, hydrogen, etc.
It is in this context that Ksapa has been mandated by an American investment fund managing more than USD 2 billion in assets to perform ESG & political analysis in a due diligence process for an acquisition of a renewable energy player in Europe.
Ksapa was mandated to develop five studies: one per specific territory in the European Union. The good knowledge of the specific challenges of the territories, the knowledge of the regulations in force and the capacity to give perspectives on the next decade allowed the client to have a more realistic vision on the perspectives of opportunities.
The studies were able to present the environmental, social, societal and political situation of these territories, with a specific focus on the prospects in the renewable energy sector.
It was a question here of using our reading grids to accompany the American investment fund in its good understanding of the stakes, the challenges and the opportunities on the development of renewable energies on these territories.
In order to ensure that the final client has a realistic vision to make an informed decision, Ksapa has established reports with a description of the socio-territorial issues and prospects for the future, through a sectoral watch on the challenges specific to each territory.
The reports include, among others, a historical overview in order to understand the social realities, the past, present and future political configuration (taking into account electoral calendars and, when possible, the potential impact on energy projects), the main economic activities as well as the major investment projects to come.
Throughout the discussions, Ksapa ensured that the reports included the necessary reading grids to identify weak signals that could impact on potentially planned investments.
In addition to the individual reports, Ksapa provided an overall report to summarise the key points, commonalities and strong divergences that needed to be taken into account in the client’s decision making according to its investment criteria.
RESULTS & NEXT STEPS
The finalised studies were transmitted to the decision-makers in the investment fund who commended the quality of the deliverables. This has enabled progress to be made on the final decision-making process on the basis of a confirmed knowledge of the specific ESG & political issues at stake in the territories studied and a mid- and long-term vision of the challenges to come.