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NEW YORK (Reuters) – Private equity firm Carlyle Group (NASDAQ:CG) Inc has formed a unit to build solar and other renewable energy plants as part of a push into creating infrastructure to address the global shift away from planet-warming fossil fuels.
Carlyle did not say how much it expected to spend to reach a targeted project pipeline of 10 gigawatts by 2030 for the new unit, named Telis Energy. The group says it has invested around $1.2 billion in renewable assets since late 2018.
For years, infrastructure funds have been buying stakes in low-carbon energy generation for steady returns. As competition grows, those groups are venturing into projects in their early stages to develop them.
“We would rather build,” Pooja Goyal, chief investment officer of Carlyle Infrastructure, told Reuters.
“We didn’t just buy an existing platform or an existing portfolio. We said we think the better risk-adjusted way to do this is to build a platform that will deliver these projects from the get-go.”
Carlyle Infrastructure manages assets worth about $15 billion in the power, energy, transport, digital and water sectors.
Australia’s Macquarie Group (OTC:MQBKY) Ltd launched an offshore wind farm developer last year and Carlyle set up a U.S.-focused renewables business shortly after.
In Europe, Telis Energy will focus on Britain, France, Spain and Germany.
“We are absolutely looking to either partner up with local developers or potentially acquire some development platforms,” Goyal said.
It is cheaper to make power from low-carbon sources than from fossil fuels in much of the world, but the financial models underpinning investment in renewables sites have wobbled under rising costs for materials and logistics aggravated by COVID-19 and Russia’s invasion of Ukraine.
“There are supply chain constraints partly exaggerated by the pandemic but also because you are seeing a lot of rapid growth in renewables. A lot of investment needs to happen in supply chains,” Goyal said.
