OMERS and PGGM invest in Puget Sound Energy as Macquarie exits

Pension funds OMERS and PGGM have acquired stakes in Puget Sound Energy, after Macquarie has exited its investment in the US energy company.

Canada’s OMERS and the Netherlands’ PGGM now own 23.9% and 10%, respectively.

Other existing institutional shareholders have also increased their stakes. British Columbia Investment Management Corporation (BCI) and Alberta Investment Management Corporation (AIMCo), which have held interests in the company since 2009, now own 20.9% and 13.6%, respectively.

Canada Pension Plan Investment Board (CPPIB), which has also been an investor since 2009, maintains its 31.6% position.

Together, AIMCo, BCI, OMERS and PGGM are acquiring the non-controlling, 44% interest held since 2009 by Macquarie Infrastructure Partners, a fund launched by Macquarie Infrastructure and Real Assets in 2007.

The €215bn PGGM said it is acquiring its 10% stake because of its commitment to sustainable energy.

In a statement it said PSE – a supplier of electricity and natural gas to 1.1m and 800,000 customers, respectively, in Washington state – was committed to halving its carbon footprint by 2040.

PGGM said the energy firm said was based in an area with a strong economy and population growth, as well as government and local support for a transition to sustainable energy.

Its strategy included phasing out coal as of 2022, combined with expanding its capacity for sustainable energy.

PSE already supplies 49% of its electricity from sustainable sources and owns more than 1,000MW of combined hydro, wind and solar power.

PGGM said “the quality of PSE’s management, the regulatory character of its market as well as the positive economic outlook for Washington state were expected to contribute to attractive and stable returns for PGGM’s clients, including the €203bn healthcare pension fund PFZW”.

It did not disclose the amount of capital involved or the returns it expected to generate.

Commenting on the deal, Erik van de Brake, PGGM’s head of infrastructure, noted that pension assets would be well deployed against proper returns for financing the energy transition.

“PSE is a good example of an energy company that has started the energy transition following increasing customer demand for green energy as well as regulation that encourages sustainability,” he said.

PGGM is aiming to halve the carbon footprint of its equity holdings between 2015 and 2020, while also investing in climate-change solutions.

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