The Financialisation, Marketisation and Privatisation of Renewable Energy
626 transactions in global renewable energy secondary market in 20 months in 2019-2020 cost US$289bn
- 34% of transactions involved private equity funds;
- The public sector accounted for only 4.4% of transactions;
- 140 transactions involved a parent company or subsidiaries registered in tax havens;
- Europe and North America dominated the global changes in ownership of wind, solar, hydro and battery projects;
- 38 assets were acquired into public ownership (15,270MW), 14 assets were privatised (14,504MW) and 14 assets were transferred between public authorities (5,175MW) –there was a net gain in the number assets transferred to the public sector but only a small gain in the level of MW.
- US$8.4bn of the total cost were fees to consultants, lawyers and asset management companies to negotiate transactions
- Renewable energy electricity generation is largely in the control of finance capital and market forces so, that by 2050, generation, distribution and supply could be substantially owned and controlled by the private sector.
PPP Equity Database: Update ESSU PPP Equity Database 1998-2016
ESSU PPP Equity Database Update 1998-2016
The updated ESSU PPP Equity Database records 462 transactions between 1998-2016 involving the direct sale of equity of 1,003 projects (including those where equity was sold multiple times) at an estimated cost of £10.3bn. The average annual rate of return was 28.7% in 1998-2016 more than double the 12%-15% annual rate of return in PFI/PPP Final Business Cases.
A sample of 334 projects, a third of the total number of projects engaged in the sale of equity in 118 transactions, a quarter of the transactions between 1998-2016, provides information to determine the annual rate of return.
In 2016, 100% of equity transactions were to offshore infrastructure funds in Jersey, Guernsey and Luxembourg, based on the ESSU sample of 334 projects. The percentage in 2011 and 2014 was 70% for both years and 60% and 61% in 2015 and 2013 respectively.
See PPP Profiteering and Offshoring: New Evidence for analysis of the updated 2016 Database.
ESSU PPP Equity Database 1998-2012
The ESSU UK PPP EQUITY DATABASE and the PPP WEALTH MACHINE: UK and GLOBAL TRENDS in TRADING PROJECT OWNERSHIP report on the sale of equity in PPP projects in the UK and globally. It recorded 281 PPP equity transactions involving 716 PPP projects (including multiple changes in some projects) 1998-2012. Included a sample of 93 transactions involving 226 PPP projects profit and annual rate of return data.
The average annual return on the sale of equity in UK PPP project companies was 29% between 1998-2012 – twice the 12%-15% rate of return in PPP business cases at financial close of projects. PPP equity was sold an average of 6 years after the financial close of the project. The annual return for infrastructure investment is significantly higher than the annual return for shares, bonds and property investment.
See Private Wealth Machine for full analysis of the 1998-2012 Database.
Appendix 5 details PPP assets sold 1998-2012.
An annual report and tables on PPP strategic partnerships in ICT and corporate services, planning, education, police, fire and rescue, property, highway services and waste management.
Sale of UK Secondary Market Infrastructure Funds 2003-2016 Database
The Financial Commodification of Public Infrastructure, ESSU Research Report No. 8 provides data of the onshore/offshore sale of secondary market funds trading in PFI/PPP equity and tracks the changing ownership of projects between 2003-2016 (pages 47-54).
Details 11 buyouts, 20 terminations and 43 projects with major problems, plus many bailouts, accounting for 28% of PFI/PPP contracts by capital value.