IN DEPTH: Marubeni seeks early view

What lies behind Marubeni's stake in MRP?

Japanese conglomerate Marubeni sees this week’s deal for a stake in Irish developer Mainstream Renewable Power (MRP) as a chance to get in on the ground-floor of major global projects, executives told Recharge.

Marubeni is spending €100m ($133m) for a 25% stake in MRP – the latest in a string of deals the power-producer has made in the renewables space over the last year.

But with the MRP investment in particular, it hopes to broaden its development expertise by working on projects from conception to completion – with offshore wind of particular interest.

“Marubeni needed early-stage development resources on a global basis,” Marubeni Europower president Hiroshi Tachigami told Recharge from London.

“Marubeni is generally interested in all projects (MRP) is currently working on.”

“One of the things we see in (MRP) is the ‘offshore story’, where Marubeni seeks to locate itself in all stages of the offshore wind value chain…from feasibility studies, pre-construction, construction, operation and decommissioning.”

In September 2012 Marubeni entered European offshore wind when it purchased a 49.9% stake in the UK’s 172MW Gunfleet Sands project.

It then teamed up with Japanese government-backed private equity group INCJ to buy UK-based offshore wind installer Seajacks.

Tachigami said: “We see Gunfleet Sands, Seajacks and (MRP) delivering the best mix of businesses.”

Many of Marubeni’s investments – for example its October 2012 purchase of a stake in EDF's 205MW Lakefield wind farm in Minnesota – have involved jumping into existing projects.

The purchase of a 50% share of 3.3GW of Portuguese energy assets held by GDF Suez for about €400.2m ($530.7m) – announced this week simultaneously with the MRP deal – also fits that pattern.

The GDF purchase was described as a good deal at the right time by Marubeni – and it is far from the only Japanese group to see value in European power and infrastructure assets.

But a Marubeni spokesperson in Tokyo said the MRP deal fits into the wider, more strategic picture. “We want to learn how to develop power plant assets from the start. And after construction, we’ll have the option to acquire stakes in projects.”

One clear objective for Marubeni is to expand into new markets.

Its acquisition of Seajacks, for example, could facilitate expansion throughout East Asia's fledgling offshore wind segment.

“We feel that the offshore wind market will grow in the future. And we know that one development bottleneck for wind is ships and vessels to build offshore farms,” the Tokyo spokesperson says.

It has also joined investors such as internet giant Google to participate in the development of the New Jersey Energy Link, a plan to build a 3GW subsea transmission cable for future offshore wind export to the eastern US grid.

Geographically, Marubeni’s existing generation portfolio – roughly 29.8GW, most of it in gas and coal, but with a smattering of wind assets – spans just about every corner of the globe except for Africa and South America, which is where MRP comes in. The Ireland-based group is active in both.