EDF wins McDonald's EV charging tender

Breaking News 17 April

EDF wins McDonald's EV charging tender

EDF Energ[EPA:EDF] has won a competitive tender to install thousands of electric vehicle (EV) charging points across McDonald’s [NYSE:MCD] restaurants in France.

As the preferred bidder, EDF will form a joint venture with the fast-food chain and is gearing up to invest EUR 500m to build the electric network from its balance-sheet, sources said.

Around 2,000 McDonald's sites are available for the partnership, although EDF will not necessarily install EV charging points in all of them, sources said.

The process is live and due to close very soon, sources said.

Among the unsuccessful bidders were Meridiam-backed EV charging group Allego, which entered the tender with Santander as financial advisor but “left the process very early”; and French transport and infrastructure group Vinci, sources said.

McDonald’s launched the tender process over a year ago without a financial advisor, sources said, and advisors started pitching for buyside roles around October 2021.

However, McDonald’s paused the process early last year to clearly define the project in detail and restarted the process once the details had been “clearly designed”, a source told Infralogic.

The restaurant chain is "asking for a very low price of electricity," according to a source, meaning that it wants the price per kWh charged to end-drivers to be as cheap as possible.

This deal is set to be the first of many for EDF, which is planning the launch of a specific platform to hold stakes in similar projects, one source said.

EDF’s goal is to replicate similar contracts with other retailers or restaurant chains, “with a view to have a broad coverage of the territory,” the source added.

In 2021 EDF Group rolled out more than 6,000 charging points in France, the UK, Italy and Belgium on average each month, according to its website.

The company was also aiming to have a 30% market share in electricity supply for EV owners by this year by installing 400,000 charging stations and 20,000 smart charging stations, its website says, although the size of its current portfolio is unclear.

McDonald’s completed a similar deal in the UK with EQT-backed EV charging developer InstaVolt in June 2020, introducing EV rapid-charging points as standard across its newer UK Drive-Thru restaurants.

InstaVolt’s rapid charging points are capable of charging at 125kW and can deliver an 80% charge in less than 20 minutes, according to the statement.

McDonald's UK aims to create a nationwide charging network to support increasing demand for EVs, and all the energy it buys to run its restaurants comes from renewable wind and solar power, according to a statement.

McDonald's and EDF’s deal is also “very similar” to a partnership struck by French retail operator Carrefour [EPA:CA] and Allego in November 2021, one source said, under which Allego is developing over 2,000 fast and ultra-fast EV charge points at more than 200 locations in France.

The network was set to be operational by this year, although is unclear whether all charge points are up and running.

The total investment from all parties to develop the network was estimated at EUR 138m, and approximately EUR 55m of the total was set to be financed by senior debt contributions from seven European commercial banks.

In December, Allego completed a EUR 400m debt raise to support its “significant backlog” of signed contracts, the company said at the time, although it is unclear whether the Carrefour projects are included in the backlog.

It expanded its credit facility by adding EUR 230m to the existing EUR 170m debt, with a maturity in December 2027.

EDF and Santander declined to comment. McDonald’s, Vinci, Allego and Meridiam did not respond to a request for comment.

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