Brookfield Highlights $30B Origin Decarbonisation Investment

Brookfield, a Canadian investment giant, has made headlines with its ambitious plan to invest a staggering $30 billion in the decarbonisation of Origin Energy, Australia's second-largest energy generator and retailer. The company, together with its partner, US investor EIG Partners, has submitted a merger application to the Australian Competition and Consumer Commission (ACCC), arguing that the acquisition of Origin Energy will greatly accelerate Australia's journey towards a greener future.

With its application, Brookfield aims to convince the ACCC that the takeover is in the national interest and will have significant public benefits. The company asserts that the acquisition will not raise any substantial competition concerns and instead will contribute significantly to Australia's decarbonisation efforts.

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According to Brookfield, their proposed $18.7 billion takeover of Origin Energy will not only facilitate but also expedite the expansion and advancement of renewable energy projects. Their investment commitment of $20 billion to $30 billion underscores their determination to rapidly build and develop renewable generation and storage assets.

Brookfield envisions the development of up to 14 GW of new renewable energy capacity within Origin Energy by 2033, a goal that surpasses the estimated renewable capacity Origin Energy would achieve under its current ownership structure. Brookfield's plans extend beyond Australia's borders as well.

In 2023, the company acquired the remaining 50% stake in X-Elio, a Spanish-based renewables developer, from its joint venture partner, KKR.

This acquisition has provided Brookfield with access to a portfolio of renewable assets in Australia, further bolstering its commitment to decarbonisation. The company emphasizes the separation between its ownership of AusNet Services and Origin Energy, stressing that these two entities have different backers. This separation is crucial, as it ensures that there will be no ability or incentive for AusNet to hinder competition from Origin's generational competitors.

Brookfield points out that Australia's highly regulated transmission and distribution sectors offer limited opportunities for such foreclosures. The proposed acquisition involves Brookfield, GIC, and Temasek taking over Origin Energy's retail and generation businesses, which currently command a significant 24% market share in Australia's national electricity market.

The deal represents a significant step toward Brookfield's vision of leading the decarbonisation efforts and shaping the energy landscape in Australia. In addition to their existing ventures, Brookfield has recently announced a partnership with Greenleaf Renewables, an emerging developer. This collaboration will further strengthen Brookfield's decarbonisation plan for Origin Energy, facilitating the realization of its ambitious goals.