On Wednesday, listed electricity distributor AES Corp announced that Fluence, the global energy storage provider that it owns together with German tech multinational Siemens AG, will receive a substantial investment from the Qatar Investment Authority (QIA), the sovereign wealth fund of the Gulf emirate. Specifically, QIA will invest $125 million in Fluence through a private placement transaction, subject to regulatory clearances and other customary closing conditions. QIA’s minority stake implies a valuation for the company of more than $1 billion.
Founded as a joint venture of Siemens and AES in 2018, Fluence develops energy storage technology designed to accelerate widespread adoption of renewable energy, allowing utilities and power producers to incorporate renewable sources (e.g. wind and solar) at scale. To date, the company has enabled the storage of 2,400 MW of renewable energy across 100 projects in 24 countries and territories worldwide.
Fluence will use the net proceeds from the private placement to further accelerate development of its product offerings, particularly digital products, and deployment of existing products in more markets globally.
AES and Siemens will remain major shareholders, each maintaining an approximately 44 percent stake post-transaction and will continue to support Fluence’s long-term growth.
“We believe the global problem of climate change can only be tackled by leveraging the combined capabilities of technologists and investors from around the world,” said Fluence Chief Executive Officer Manuel Perez Dubuc, in an official statement on Wednesday. “We see energy storage as the linchpin of a decarbonized grid and adding QIA to our international shareholder base will allow Fluence to innovate even faster and address the enormous global market for large-scale battery-based energy storage.”
One Planet Sovereign Wealth Fund Initiative
QIA is one of six founding members of the One Planet Sovereign Wealth Fund Initiative, a network founded in 2017 by the sovereign wealth funds of Qatar, along with Abu Dhabi (ADIA), Kuwait (KIA), New Zealand (NZ Superfund), Norway (Norges Bank Investment Management), and Saudi Arabia (PIF), to build climate change into financial decision making.
In November, a joint communique from the third annual One Planet Sovereign Wealth Funds Summit in Paris announced that 33 CEO’s from the world’s largest institutional investors, representing more than $30 trillion in AUM and ownership, had aligned behind the original One Planet Sovereign Wealth Funds Framework to support the goals of the Paris Agreement and accelerate climate-related objectives into large, long-term asset pools.
Additionally, nine new SWF’s (from France, Italy, Spain, Senegal, Ireland, Korea, Abu Dhabi, India and Kazakhstan) and six new asset managers (AXA Investment Managers, Invesco, Legal & General Investment Management, Morgan Stanley Investment Management, PIMCO and UBS Asset Management) joined the original six Founding SWF Members in pledging support for the framework and sharing evidence of recent climate-related actions.
As stated in Wednesday’s formal announcement of the deal, Qatar’s proposed investment in Fluence further highlights QIA’s growing focus on the development of green technologies.
“We are proud to partner with Fluence, which is at the forefront of the global drive to provide energy storage solutions,” said Mansoor bin Ebrahim Al-Mahmoud, QIA’s Chief Executive Officer. “We believe energy storage will play a key role in delivering cleaner, more sustainable and more resilient electric grids around the world. This investment further underpins our commitment to responsible investing for a low-carbon future.”
“Energy storage is playing a crucial role in enabling markets and organizations to achieve their goals for a carbon-free energy future,” said Andrés Gluski, AES President and Chief Executive Officer. “We are very pleased with Fluence’s success and today’s announcement is an important milestone toward maintaining Fluence’s global leadership in energy storage and achieving its growth potential.”
“Energy storage is a key pillar of the energy transition. Siemens has defined this as a significant long-term growth area,” said Matthias Rebellius, CEO of Siemens Smart Infrastructure and member of the Managing Board of Siemens AG. “QIA’s investment will support Fluence with its successful development in a dynamic market.”
The Fluence team has been a driving force in the global energy storage industry for more than a decade, repeatedly opening new markets and pioneering new applications. This past summer, the company announced its sixth-generation Tech Stack, comprised of integrated hardware, operating software and digital intelligence engines. Built on 12 years of proprietary operating data from systems in the field, the Tech Stack enables faster deployment of standardized, modular systems, lower balance of system costs, and highly customizable solutions to meet individual customer needs.
In October, Fluence announced its acquisition of AMS’ AI-driven software and digital intelligence platform for renewables and energy storage, which can significantly improve revenue of energy storage assets in wholesale markets, and plans to accelerate investment in its digital differentiation.