Octopus Energy Valued at Almost $5 Billion After Latest Investment

(Bloomberg) -- Canada’s top pension fund is investing $300 million in Octopus Energy Group in a deal that increases the U.K. energy supplier’s valuation to about $5 billion.

The Canada Pension Plan Investment Board is making the initial investment with a view to increase funding over time to help drive the transition away from carbon-emitting energy sources, the companies said in a statement. The deal will give CPP Investments a 6% stake in Octopus, according to a spokesman for the energy supplier.

The announcement comes months after Al Gore’s Generation Investment Management LLP bought a 13% stake in Octopus for $600 million. It also provides a confidence boost for Octopus as the U.K. faces an energy crisis -- with more than 20 gas and electricity suppliers having already gone out of business -- and puts its value near to that of Centrica Plc, the U.K.’s biggest utility.

Octopus owns wind and solar farms across Europe and sells green electricity services to over 3 million customers in the U.K., where it’s the fifth-biggest power supplier. CPPIB’s investment will help Octopus accelerate the transition of its assets globally and expand generation of renewable power. 

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.

CPPIB’s assets under management grew to C$541.5 billion ($426 billion) in the quarter ended Sept. 30 from C$519.6 billion in the previous three months. The fund returned 3.8% in the quarter net of all of CPPIB costs.

Octopus has customers in the U.S., Germany, Spain and New Zealand. In March, it acquired 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.

“Innovating new ways to accelerate investment into the renewable energy revolution is vital to delivering governments’ net-zero goals, and the CPP Investments-Octopus partnership is globally significant,” said Octopus Chief Executive Officer Greg Jackson. 

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