By Nina Chestney
LONDON (Reuters) -UK power supplier Octopus Energy Group said on Monday it has agreed a deal with Generation Investment Management for $600 million in additional investment, taking the group's valuation to up to $4.6 billion.
The agreement will see Generation take a stake of up to around 13% in the business. Octopus said it will use the proceeds to boost investments in clean energy generation.
The deal consists of $300 million immediate investment, with $300 million to follow by June 2022, subject to certain further funding conditions, Octopus Energy said.
Octopus Energy supplies energy to over 3 million customers in Britain, having taking over some customers over the weekend from Avro Energy, which ceased trading.
Several small UK energy suppliers have failed in the past weeks and months, leaving more than 800,000 customers potentially facing higher bills, after a jump in natural gas and power prices pushed the sector to the brink.
In the UK energy market, small providers that had launched in recent years have been hit by the jump in costs. From more than 70 suppliers in 2018, now there are around 30.
The country's energy regulator Ofgem and business minister Kwasi Kwarteng have warned parliament that soaring gas prices would force more suppliers out of business and that the industry should prepare for a tougher environment.
"Whilst the UK energy market is currently in a tough state, it’s highlighted the need for investment in renewables and technologies to end our reliance on fossil fuels," said Octopus Energy, Founder and CEO, Greg Jackson.
Octopus Energy manages over 3 billion pounds ($4.10 billion) of renewable energy generation. Generation Investment Management, is headquartered in London and focuses on sustainable investments and former U.S. vice president Al Gore is the chairman and co-founder.
($1 = 0.7311 pounds)
(Reporting by Nina Chestney; Editing by Bernadette Baum)