Two of Canada’s largest pension funds have paused the sale of Cubico Sustainable Investments, a renewable energy developer they had hoped could attract bids exceeding $6 billion, including debt, according to sources familiar with the matter.
The Public Sector Pension Investment Board (PSP) and the Ontario Teachers’ Pension Plan (OTPP), co-owners of Cubico, launched the sale process nearly two years ago amid high market valuations for low-carbon energy firms. However, offers submitted fell short of shareholder expectations, prompting the auction to be suspended, two of the sources said.
“There are no immediate plans to restart the process,” said a source, indicating that investor sentiment in the sector has shifted.
Some suitors valued Cubico at approximately €5 billion ($5.9 billion), including debt. Among the interested parties were Spain-based infrastructure fund Qualitas Energy and KKR-backed power producer ContourGlobal, the sources added.
None of the involved parties—including PSP, OTPP, Cubico, Qualitas, ContourGlobal, or KKR—responded to requests for comment.
Cubico, established in 2015 and jointly owned by PSP and OTPP since 2016 after acquiring Banco Santander’s renewable energy portfolio, operates wind, solar, and transmission assets across Europe, the Americas, and Australia. Its portfolio includes 2.8 GW of generation capacity, encompassing concentrated solar power and transmission lines.
The company reported earnings of $625 million in 2023 before interest, tax, depreciation and amortisation (EBITDA), and earlier expectations pegged its valuation at nearly 10 times that figure, according to previous Reuters reports.
Market conditions, however, have become less favourable. Investor enthusiasm for renewables has tempered, particularly in the U.S., where demand for polluting power sources has surged to support energy-intensive artificial intelligence projects. Additionally, concerns have grown over former U.S. President Donald Trump’s renewed support for fossil fuels and regulatory rollbacks.
Despite earlier interest from at least one corporate utility and several financial firms betting on a green transition, wider market volatility and geopolitical uncertainty have weighed on deal-making in the clean energy sector.
