Orix Corp. is in discussions to buy renewable energy developers in the US and Europe, as the Japanese financial conglomerate seeks to meet growing demand for cleaner power from multinational clients like Amazon.com Inc.
Individual deals could top $1 billion, although Orix is proceeding cautiously, Hidetake Takahashi, head of energy and eco services at the firm, said in an interview.
“Our strategy is to build the capacity to supply renewable energy globally,” he said. “We don’t want to regret after paying too much, though we want to acquire them soon.”
Orix, whose operations span banking, insurance, real estate and private equity has pushed into renewable energy in recent years, an area where it sees significant growth potential. It agreed to buy an 80% stake in Spain’s Elawan Energy for about 100 billion yen ($684 million) in 2020, giving it a platform to expand the business globally. The Japanese company later acquired the rest of Elawan.
The conglomerate’s environment and energy segment, which includes renewables, could almost double its assets to as much as 1.5 trillion yen given the right opportunities, Takahashi said. Orix had renewable energy capacity of 4.3 gigawatts as of September, including projects in which it has partial stakes, and is aiming to increase that to 10 gigawatts by 2030, he said.
In the US, where Orix’s renewable energy business is underweight, Takahashi said he’s considering opportunities to buy a company like Elawan.
A growing number of corporate clients in Japan and overseas are moving to secure renewable energy supply, as they aim to meet zero carbon emission targets, he said. Amazon.com Inc.’s energy unit recently expanded its power purchase agreement with Elawan, according to Orix.
“It would not be enough that we can meet requests by Amazon in Spain and Japan but not in the US, China or India, for instance,” he said.
Orix and Elawan are building wind and solar power projects on their own in Europe and the US, even as the company is in talks with potential acquisition targets in these regions, Takahashi said.
Still, the company is conscious of efficient use of its balance sheet, and in the future, it could set up a fund so that outside investors can own a portfolio of its renewable energy assets, he said.
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