Grupo T-Solar, Munich Re and KKR to Form Partnership in Solar Energy

Grupo T-Solar, the largest European solar photovoltaic (PV) power generator, Munich Re, one of the world´s leading insurance groups, represented through its asset management arm MEAG, and global investment firm Kohlberg Kravis Roberts & Co. L.P. (together with its affiliates, “KKR”) today announced that Munich Re and KKR have partnered to acquire a 49% equity stake in the existing operating assets of Grupo T-Solar. Grupo T-Solar total capex to date for these assets has been €1,073m.

“We are especially pleased to enter into a partnership with the best-in-class solar PV operator in Europe (Grupo T-Solar) and a leading asset manager like MEAG.”

The assets being acquired comprise a diversified portfolio of 42 solar PV plants located in Spain (34 plants) and Italy (8 plants) with aggregate installed capacity of 168 MW and a generation capacity of over 250 GWh per year of clean energy. These assets will be housed in a new company named T-Solar Global Operating Assets (the “Company”) in which Grupo T-Solar will continue to retain a 51% equity stake and provide management services. MEAG and KKR have also entered into an agreement with Grupo T-Solar that gives the Company the option to acquire new solar plants developed by Grupo T-Solar once they are fully operational.

The timing of this transaction coincides with the restructuring of its concession businesses, a process in which the Isolux Corsán group has taken over the control of Grupo T-Solar. Isolux Corsán is a multinational group specialising in concessions and construction for major infrastructure projects. It has now concentrated all its concession assets (including its holding in Grupo T-Solar) under the umbrella of a single new company, Isolux Infrastructure.

Commenting on the partnership, Juan Laso, T-Solar CEO said: “T-Solar’s mission is to harness the sun’s power to generate clean electricity using photovoltaic technology. We started in 2006 and have grown into the largest European PV power generator. This alliance with highly qualified and experienced investors such as MEAG and KKR is very exciting for us as it enables us to expand our presence in the solar photovoltaic sector and consolidate our position as a leading operator in the renewable energy space. The business plan of the group envisages an increase in its generation capacity from 168 MW to over 500 MW by 2014”

The investment has been done under Munich Re’s investment program “RENT” (Renewable Energy and New Technologies). Munich Re’s asset manager MEAG is responsible for selecting and managing the investments. Dieter Wolf, MEAG Managing Director, in charge of portfolio management stated: “Renewables are the energy source of tomorrow. We are confident that this is where the future lies, and so we are investing in wind farms, solar farms and new technologies designed to increase generating capacity. Our strategic focus features renewable energies and new technologies – designed to include in our investment portfolio sustainable investments offering attractive returns at an acceptable level of risk. We view this investment as a unique opportunity to partner with both a leading operator in renewable energy and a leading global investment firm.”

For KKR, the partnership represents its second, significant European infrastructure investment in renewable energy in just over one month.

“KKR is continuing to develop its infrastructure platform, and we see renewable energy as one of the most promising areas of infrastructure. We also believe that the Spanish renewables sector is currently an attractive investment destination. T-Solar’s plant portfolio comprises core infrastructure assets providing stable and long-term cash flow visibility as well as offering significant growth potential. We continue to be excited about the opportunities we are seeing in the infrastructure space and believe that this investment will complement our recent partnership in the French wind energy sector with Sorgenia,” said Jesus Olmos, the European Head of KKR’s infrastructure business. “We are especially pleased to enter into a partnership with the best-in-class solar PV operator in Europe (Grupo T-Solar) and a leading asset manager like MEAG.”

MEAG in Munich is the asset manager of Munich Re and ERGO. With offices in New York and Hong Kong, MEAG has an international orientation and also manages the assets of clients outside Munich Re und ERGO. MEAG currently manages assets to the value of around € 202 billion, around 10 billion of which in real estate.

Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a leading global investment firm with $61.0 billion in assets under management as of March 31, 2011. With 14 offices around the world, KKR manages assets through a variety of investment funds and accounts covering multiple asset classes. KKR seeks to create value by bringing operational expertise to its portfolio companies and through active oversight and monitoring of its investments. KKR complements its investment expertise and strengthens interactions with investors through its client relationships and capital markets platforms. KKR is publicly traded on the New York Stock Exchange (NYSE: KKR).

T-Solar is a pioneering independent power producer (IPP), subsidiary of the Isolux Corsan group, whose installed capacity makes it a leader in the generation of photovoltaic power world-wide. It currently has an installed capacity of 168,2MWp in Spain and Italy. Additionally, T-Solar has 61 MW under construction and a pipeline of 900 MW that it will be developing in its priority countries: Southern Europe, Latin America, India and USA. The photovoltaic power stations in operation generate over 250GWh per year of clean electricity. This is equivalent to the average annual electricity consumption of a town of 51,000 homes. In 2010, T-Solar achieved total revenues of €110.2m. Up to the end of 2010, the company had invested more than €1.16 bn in its business plan. In addition, at its factory in Orense (Galicia), T-Solar produces the largest modules (5.7m2) available on the market, using thin-film amorphous-silicon technology. This helps reduce costs and increase performance. Its fully automated plant has a production capacity of 50 MW per year, the equivalent to 700,000 m2 of solar panels.