Infracorp’s Investment With Equitix In Electricity Distribution

Aurora serves a blue-chip international industrial client base that is highly committed to the network and has invested more than $4.8bn in the company’s two sites (AKO and ATO) since 2005.

As mentioned in the report, Aurora’s AKO site serves government-backed and/or listed customers in the traditional fuels, renewable fuels, and chemical products segments, with its main clients being Neste, Borealis, Linde, and Veolia.

Its ATO network, meanwhile, serves Outukumpu, the largest integrated plant and the only fully integrated stainless steel facility in the world.

According to the report, Aurora’s electricity distribution network represents physically irreplaceable assets that are supported by long-term contracted cash flows, high margins, a semi-regulated tariff structure, inflation and interest rate pass-throughs, significant barriers to entry, and an inelastic demand profile.

Consistent with Infracorp’s focus, Aurora has a strong ESG basis and also benefits from the commitment of the company’s customers to ESG principles with well-publicized strategies on the decarbonization of their on-site operations underpinned by further electrification.

Infracorp will also enter into future collaborative discussions with Equitix, a leading global investor and long-term fund manager of core infrastructure assets.

Equitix has over $11.7 billion of assets under management and is the infrastructure investment division of Tetragon, the global asset management group that manages $80 billion of assets on behalf of its clients, according to the report.

Following this initial collaboration, Infracorp will look into additional opportunities to collaborate with Equitix to invest in select infrastructure deals on a discretionary basis.

Any such potential opportunities will offer the ability to strengthen Infracorp’s global infrastructure investment platform in Europe and the Americas across a range of defensive and downturn-resistant infrastructure sector investments.

Majed Al Khan, CEO of Infracorp, commented, "In line with our vision, we’re pleased to announce this investment in Aurora, which provides critical power distribution infrastructure for strategic blue-chip industrial customers committed to energy transition in Finland, including the two single largest electricity consumers in the Nordics."

He added, "Aurora’s electricity distribution network connects its customers’ sites to the main power grid, making them strategic for the European and global value chain in the chemicals and stainless steel industries." There is no other alternative electricity distribution network available to its customers at these sites, making this a unique asset. "We are delighted to be working with Equitix, a leading global infrastructure asset manager with deep experience in managing and maximising the value of similar infrastructure assets."

Awais Majeed, Executive Director – Private Equity at GFH, said, "In line with our strategy of investing in resilient, ESG-impacting sectors, this transaction marks another investment in a sector that has proven resilient and which we expect to remain relatively immune to economic cycles." Aurora operates in a stable, business-friendly environment with macroeconomic trends providing a favourable backdrop for infrastructure investments.

According to him, it also benefits from an established energy system in Finland and a unique position in the electricity distribution space with no exposure to volume risk as well as a robust customer base with large, well-established counterparties, backed by the Finnish government.

"We look forward to working with Aurora’s highly experienced management team to continue to enhance the value of its assets and to further improve efficiency for the benefit of all stakeholders,"  Awais Majeed added.

Hugh Crossley, Chief Executive Officer at Equitix, said, "We are pleased to work with GFH and Infracorp on this excellent investment, which provides a critical electricity network to the Finnish economy." The investment opportunities in infrastructure remain extensive, and Equitix is uniquely structured to source and execute core infrastructure investments, manage them responsibly, and deliver outstanding risk-weighted returns. "We look forward to collaborating with GFH further."

He added, "Equitix values the partnership, and there is ample opportunity to explore a pipeline of attractive opportunities across the UK, Europe, and the Americas together." This concludes the report.

 By Sumita Pawar