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Harald Schützeichel

Four french off-grid musketeers (part 2): ENGIE

GDF Suez (from 2015: ENGIE) was created in 2008 by the merger of Gaz de France (GDF), a gas supplier in which the state holds a majority stake, and the Suez conglomerate. The new company soon changed its corporate strategy: it withdrew completely from oil and gas production, stopped investing in coal-fired power plants in 2015 and is gradually divesting its shareholdings in these plants.

Instead, ENGIE is now concentrating on renewable energies and associated services - and confirmed this very early with the decision to invest USD 25 billion in renewable energies, energy services and decentralised energy technology. Today ENGIE is growing strongly in all new business areas. With an electricity generation capacity of 115.3 GW, ENGIE is currently probably the largest independent electricity producer in the world.

To date, the central strategic instrument in the Energy Access area is the company's own investment fund "ENGIE Rassembleurs d'Energies", founded in 2011 and initially endowed with 10 million euros. The fund invests in economically viable projects by committed entrepreneurs in order to reduce the spread of fossil energy technologies and promote renewable ones.

“ENGIE Rassembleurs d'Energies" took a significant step forward again in 2016: under the new CEO Isabelle Kocher, the capital of the company's own investment fund was quintupled from EUR 10 million to EUR 50 million.

The investment strategy clearly follows ENGIE's strategic focus in the decentralised solar sector:

  • Solar home systems for off-grid regions (manufacturers and distributors)
  • Microgrid solutions (installation and operation)
  • Provider of energy services, in particular solutions for monitoring, energy management and PAYG solutions

It is interesting to note that since 2017 ENGIE has increasingly not only been looking for minority shareholdings but has also taken over the lead management of companies as majority shareholders: Fenix (100%), Simpa Networks (90%) and Electric Power Systems (50+%) are probably only the beginning.

ENGIE's clear target for the entire group is to implement the energy transition from the old central, fossil energy technology to a decentralized, renewable energy supply - worldwide. The economic dissociation from the fossil energy roots and the associated corporate restructuring are impressive in their rigor and certainly unique in the industry. Imagine if Total were to withdraw completely from the oil business and concentrate only on decentralised, renewable energy!

ENGIE is therefore probably the one of the four French "energy musketeers" who is implementing the change to a modern energy supply most energetically and with all its consequences.

 

Here are the most important investments of ENGIE in the off-grid sector since 2012 in chronological order (The annual figures of the investment are given quite differently even within the documents of ENGIE. Therefore, there may be small deviations):

 

2012: EGG-Energy, Tanzania

The minority stake (250k Euro) enabled EGG-Energy to establish a sales organisation for solar home systems (SHS) with PAYG financing for end customers.

(From 2016 this investment will no longer be mentioned in the documents of the ENGIE Fund. It is not clear whether and when an exit might have taken place.)

2013: Rural Spark, India

The decentralized products developed by Rural Spark are positioned between Solar Home System and Micro-Grid.

2014 / 2017: Fenix, US

The company designs, manufactures, markets, finances and supports PAYG solar home systems in Uganda. In 2017 Fenix becomes a 100% subsidiary of ENGIE and moves its headquarters to Uganda.

2014: Green Village Venture, India

Founded in 2008, the company sells decentralised solar systems and energy services in India.

2014 / 2016 / 2018, Simpa Networks, India

... and another PAYG company that sells solar home systems in India. In 2018, Simpa will also be the second company in the off-grid sector in which ENGIE will acquire the majority of the shares (90%) in a second step.

2015: Ilumexico, Mexico

Produces and distributes solar home systems in off-grid regions of Mexico since 2010.

2015: Mera Gao Power, Indien

Founded in 2013, the company builds, owns and operates solar micro grids in off-grid regions of northern India.

2015 / 2016 / 2017: PEG, Ghana

Founded one year before ENGIE's first investment, the company distributes solar home systems through PAYG financing in Ghana and Côte d'Ivoire. ENGIE seems to have a particularly close partnership with PEG: it has already been involved in three investment rounds.

2015: Ausar Energy, France

This is a joint venture founded in 2015 by ENGIE Rassembleurs d'Energies, Cofely Ineo and Adetel. The company designs and manufactures two technical solutions for the market in Morocco, Senegal, Côte d'Ivoire and Cameroon: one for off-grid sites and one to ensure energy autonomy for on-grid customers.

2016: Bboxx, UK

The British manufacturer of solar home systems with integrated PAYG technology was mainly active in East Africa at the time of ENGIE's investment. In the meantime, Bboxx has spread to other African countries thanks to the financial support of various investors (including EDF).

2016: CDS, Mauretanien

Founded already in 1980, CDS supplies solar home systems, but specializes primarily in the installation and operation of renewable microgrids in remote regions of Mauritania.

2017: Kingo Energy, Guatemala

Kingo sells solar home systems through PAYG credit solutions for rural households in Guatemala.

2018: Electro Power Systems (EPS), Frankreich

Electro Power Systems (EPS) is a developer of storage solutions for distributed power solutions. In addition to Europe, EPS is primarily active in Africa and Asia. ENGIE describes its entry into EPS as a clear sign of ENGIE's goal to become a global leader in the decentralised energy sector.

 

Next: Not only investments, but also own product developments - The activities of Schneider Electric.