OREANDA-NEWS. May 24, 2012. A private equity consortium comprised of the Russian Direct Investment Fund (RDIF), Xenon Capital Partners' Rusenergo Fund, AGC Equity Partners and the Macquarie Renaissance Infrastructure Fund (MRIF) has completed the purchase of a 26.43% stake in leading Russian power producer OJSC Enel OGK-5.

The investment by AGC Equity Partners, a private equity firm whose investors are Middle East institutions, represents the largest private equity investment in Russia by a Middle East investor to date.

Rusenergo Fund and AGC Equity Partners have each invested USD 175 million in the transaction, while the RDIF and MRIF have invested USD 137.5 million each for a total deal value of USD 625 million. The structure of the transaction allows for an additional payment to the seller, though this is contingent on the investment generating an attractive level of returns for the investor consortium.

In addition to the largest Middle East investment into Russia, the transaction represents the largest-ever private equity deal in the Russian power sector. The consortium of investors becomes a partner of Italian energy company Enel, the controlling shareholder in Enel OGK-5.

Natasha Tsukanova, Founder and Managing Director of Xenon Capital Partners, said:

"We are delighted that this complicated transaction has now completed. This closing cements our partnership with such high quality investors as RDIF, MRIF and AGC, a private equity firm which represents a consortium of Gulf and Middle East institutional investors. All together, we now look forward to working closely with the management of Enel OGK-5, who we rate very highly.”

Kirill Dmitriev, CEO of the RDIF, said:

“We are delighted to welcome leading Middle East investment firm AGC Equity Partners to our consortium as we close this landmark transaction. This consortium of private equity investors has acquired a blocking stake in the premium asset of the Russian power sector at an attractive valuation. The transaction represents a strong vote of confidence from leading international investors for the Russian utilities industry.”

Walid Abu-Suud, Co-CEO of AGC Equity Partners, said:

“We are delighted to be executing our first transaction in Russia, a high-growth market with under-tapped investment potential. The opportunity to co-invest alongside Russia’s new sovereign private equity vehicle RDIF and other distinguished investors gave us additional confidence as we pursued a stake in this world-class energy asset.”

Damian Secen, CEO of MRIF, said:

“Enel OGK-5 is a high growth, high quality asset, with an excellent management team developed by Enel. MRIF is looking forward to bringing global infrastructure financing, investment and management expertise to the table.”

The seller, INTER RAO UES, plans to use the proceeds from the transaction to fund its investment program, which is focused on building additional power generation facilities in Russia.