TotalEnergies agreed to acquire 50% of San Francisco-based Clearway Energy Group in a billion-dollar transaction that marks a new partnership with Clearway sponsor, Global Infrastructure Partners (GIP).

“We are delighted with this partnership with Global Infrastructure Partners, which is a major player in renewables, particularly in the United States,” Patrick Pouyanné, chairman and CEO of TotalEnergies, commented in a company release on May 25.

With 760 employees, Clearway is the fifth largest U.S. renewable energy player. The company has a 25 GW pipeline of renewable and storage projects across 34 states. Of those projects, 7.7 GW of wind and solar assets in operation through its listed subsidiary, Clearway Energy Inc., and 15 GW are in an advanced stage of development.

The Clearway acquisition marks TotalEnergies’ largest acquisition in renewable energy in the U.S., where the French multi-energy company has already established a major position, according to the company release.

“This transaction perfectly fits with our strategy to make renewable electricity one of our main growth drivers along with liquefied natural gas that we have recently reinforced with the launch of Cameron extension,” Pouyanné said referring to the expansion of the Cameron LNG facility in Louisiana announced in April. 

Clearway Energy Asset Map - TotalEnergies Acquisition May 2022 Announcement
(Source: TotalEnergies)

The acquisition brings TotalEnergies’ renewable portfolio in the U.S. to more than 25 GW and contributes to the objective that the U.S. account for at least 25% of the company’s global target of 100 GW by 2030.

“It illustrates our priority to accelerate the transformation of the company to become a sustainable and profitable multi-energy company,” Pouyanné added.

Separately, TotalEnergies also welcomed GIP as an equity partner in SunPower Corp., the second largest residential solar company in the U.S.

As part of the two transactions, GIP will receive $1.6 billion in cash and an interest of 50% minus one share in the TotalEnergies subsidiary that holds its 50.6% ownership in SunPower. The transaction takes into account valuations of $35.1 per share for Clearway Energy Inc. and $18 per share for SunPower, the release said.

“We are proud of the growth and accomplishments of the Clearway team since our initial investment in 2018, and we are confident that with TotalEnergies as a partner, Clearway will be able to accelerate the deployment of cost-competitive renewable power in the U.S.,” Adebayo Ogunlesi, chairman and CEO of GIP, commented in the release.

As part of this partnership, TotalEnergies will contribute to enhance Clearway’s growth prospects by providing Clearway Energy Inc. in the U.S. with access to its power trading capabilities and will give it priority on the farm down of its own developed projects, according to the release.

“At the same time,” Ogunlesi continued, “GIP’s investment in SunPower is our initial commitment in the distributed generation space, which we believe will provide critical solutions to facilitate the nation’s clean energy future. The scale, capabilities and ambition that both GIP and TotalEnergies bring to this partnership will support our shared vision to build industry-leading utility-scale and distributed renewables platforms in the U.S.”

Both transactions are subject to customary conditions, including receipt of requisite regulatory approvals. Latham & Watkins represents TotalEnergies in the transaction with a corporate deal team led by Houston partners Ryan Maierson, Ryan Lynch and Stephen Szalkowski.