The largest pension fund in Canada is investing $300 million in Octopus Energy Group, placing the U.K. energy supplier at almost $5 billion.
According to the companies, the Canada Pension Plan Investment Board is making the initial investment with the intention of increasing funds over time to help promote the transition from carbon-emitting energy sources. According to a spokesman for CPP Investments, the deal will give the energy company a 6% stake in Octopus.
The news come months after Al Gore’s Generation Investment Management LLP paid $600 million for 13% in Octopus.
It also boosts Octopus’ confidence as the UK faces an energy crisis, with more than 20 gas and electricity suppliers having gone out of business already, and puts its value near that of Centrica Plc, the country’s largest utility.
Octopus owns and operates wind and solar farms throughout Europe and distributes green electricity to nearly 3 million clients in the United Kingdom, where it is the fifth-largest power supplier. Octopus will benefit from CPPIB’s investment as it accelerates the global transition of its assets and expands renewable energy output.
The deal is a perfect example of how investors can work with leading tech-enabled energy companies to digitally disrupt the global energy system and support the evolution to a low carbon world, said Deborah Orida, CPPIB’s chief sustainability officer.
In the quarter that ended in Sept. 30, CPPIB’s assets under management grew to C$541.5 billion ($426 billion), up from C$519.6 billion in the previous three months. Net of all CPPIB costs, the fund returned 3.8% in the quarter.
Customers of Octopus can be found in the United States, Germany, Spain, and New Zealand. In March, it purchased a 2.8-gigawatt portfolio of renewables assets across Europe worth 3.4 billion pounds, aligning its business with larger international suppliers such as E.ON SE and Electricite de France SA that combine renewable generation with customer supply.