Interview with Ike Emehelu of Akin Gump Strauss Hauer & Feld LLP
Congratulations, Ike Emehelu, on your new role as Partner at Akin Gump Strauss Hauer & Feld LLP! Although Ike knew he wanted to be a lawyer from his earliest days in Nigeria, he never imagined he would get to work on two of the three largest onshore wind projects in the U.S. Focusing almost exclusively on renewable energy project finance since 2008, Ike has worked on impactful projects throughout Africa, Latin America & the US, including through the Energy Access Relief Fund, which provided support to energy entrepreneurs facing liquidity challenges due to COVID-19. In this Green Light episode, Catherine speaks with Ike about his career journey in clean energy as well as the key trends that he thinks will make or break renewable energy in M&A in the coming years.
Catherine: Hi, I’m Catherine McLean, Founder and CEO of Dylan Green. And today I have with me Ike Emehelu from Akin Gump. Welcome, Ike.
Ike: Nice to be here. Thanks, Catherine.
Catherine: I wanted to start by first congratulating you, I know that you’ve just taken a new role on his partner and it can GM. Tell me a bit about yourself and your new role?
Ike: Oh, sure. I just joined Akin Gump about two months ago. And I used to be a partner at Norton Rose Fulbright. I was Norton Rose Fulbright, for 14 years. And before that I was at Hunter Williamson and then Sullivan and Cromwell. So I’m excited, this is an opportunity to join Akin Gump, it’s just it’s a terrific firm. And my role is to hopefully help connect different pieces of Akin Gump that are focused on the energy transition, right, so Akin Gump has probably one of the most leading public policy groups. And so many issues on the renewable energy side are driven by policy. And Akin Gump was started in Dallas, and has a huge footprint in Texas, and represent a lot of traditional energy companies. And so I’m sort of really excited to be here and sort of bring everything together, right, the old traditional energy companies, decarbonisation and the energy transition, so I’m excited to be here.
Catherine: Great. And did you always know that you wanted to be a lawyer, like focused on the energy transition? How did you make your way into that space?
Ike: Do you want me to go back to kindergarten, or…
Catherine: Tell me about the day you were born.
Ike: Exactly right? It’s like, everybody congratulated themselves, because finally Ike is here. But no, I’ve always sort of wanted to be a lawyer. I think I told my parents when I was seven years old, I wanted to be a lawyer. But the energy transition was somewhat relatively new. I grew up in Nigeria, and in law school, and I thought that I will do something that was sort of relevant to Africa. Yeah. And infrastructure sort of happened until the infrastructure as like the output for him. And so my initial interest in this wall was to be a projects lawyer and learn exactly how to structure infrastructure projects, how do you bring them to market? How do you make it work out? That evolves into realizing that quite frankly, the US has become kind of like an emerging market when it comes to renewable energy.
Catherine: Right, when it comes to renewable energy.
Ike: I mean, there’s still some issues, that we’re borrowing from waters; offshore wind is relatively muted here. So we borrowed some of those concepts from Europe. So once I sort of saw the opportunity to do this here, I just immediately latched on to this emerging sort of wall. So I’ve been focused almost exclusively on project finance since 2008.
Catherine: And I know that you’ve worked on projects, as you said, through the Americas, Africa and Latin America, what are some of the work that you’re most proud of? And why? So for example, I’m aware that you have done some work related to energy access relief funds capture energy, mulligan solar, and others. But interesting to hear your thoughts around what you’re most proud of and why?
Ike: Sure. So the energy is really fund that you mentioned a good example of sort of the power of the private market, right. So that was basically a fund that was set up to help companies that were facing a liquidity crisis due to COVID. And so these are companies that had great business models were doing well prior to the pandemic, then the pandemic occurred. And we’re facing a liquidity crisis. And the fund was designed to provide subsidized loans to them and I represented investors into the fund. So that was fantastic. I’m especially proud of the diversity of my practice. So I work on two of the three largest onshore wind farms in the US. For one I presented the lenders and the other I represented the sponsors. I worked on the first standalone energy by three projects that will be financed on a non recourse basis. And these were and each of these deals come up with brand new issues. That’s kind of why I joke that we’re a bit of an emerging market in the US, so I was just basically being proud of the fact that I’ve been able to work on transactions that hadn’t been done before, or to came up with new issues. And in their own way, help propels us to a net zero.
Catherine: Right. What are you most looking forward to, at your time at Akin and why?
Ike: Really, my colleagues, I’ve spent two months here now, and I’ve been to multiple offices and it’s just an exceptional group of people. You know, I sort of came to that earlier, Akin Gump is really uniquely placed to be you know, to maintain its role in these energy transitions. So the PLP group, the public law and policy group out of DC, they are among the best in terms of what they do, for instance, they represent the salon industry on issues surrounding tariff. So to get the benefit of their experience and the benefit of the insight into policy, and then take that I will work with my colleagues out of our Houston office, our Dallas office, that represents traditional energy companies, many of whom are interested in carbon capture and sequestration. Now, and I think the firm, we’ve probably worked on more CCUS deals than pretty much any other firm. And then add all the renewable energy work that we do. So in some places you hear people arguing about should we do gas? Or should we do solar? What should we do as we get to the energy transition? And I think my experiences are, they can go up on with the clients that we serve, is that all the clients, it seems like, there’s some sort of an agreement, everybody’s already invested in this space. And, and so to be at the firm where we sort of move away from those sort of foundational questions, and into like, relationships. Okay, let’s go on, let’s just get it done. So that has been very exciting for me.
Catherine: What are some of the key trends that you think will make or break kind of renewable energy M&A In the coming years?
Ike: The policy, I think, it’s hard to predict what’s going to come out of DC. And so, if there’s less clarity on government policy going forward, I think it affects pricing and affects people’s appetite to take risks. Right, we’ve seen that. And we’ve seen, not just not just on the tax side, but also on sort of the pure regulatory side. So we see that with PJM, for instance, and the capacity markets. So if there’s lack of clarity as to what the regulator’s would do that sort of a flexible appetite to do deals. And then I also, I’m still not convinced that we’ve as a market that we’ve completely appropriately priced, like climate change so I think as more on a spec that climate issues come up, right. And if there is no correspondence, a insurance policy or structure, and for that, I think it’s going to have an impact in the industry going forward. But there are long term issues, the more near term, it’s the things you turn to TV and you hear it’s like, will there be inflation or not inflation? You know, will interest rates go up or down? But, I think the market has a way of dealing with those sort of more near term issues. But the fundamental issues of clarity on the government policy side, what are we doing about sudden changes in weather patterns, and how they affect particular projects. And again, the last thing I’ll mention is also the, it’s kind of related to building policy, but solving the transmission issues, because increasingly, without, without a good way, to transport the electrons from where we generate them to load centers, it’s always going to have an issue, I think.
Catherine: Are there any sort of structural issues that you’re seeing that could possibly affect the renewable energy industry?
Ike: One issue that I’m not sure enough people are focusing on is I think there’s a greater need to democratize the end of the sector, right, bring in underserved communities to participate both as end users and as investors in the sector. I think a lot of the ways a lot of the focus so far the way the market has evolved, is through say the tax equity model, where the government gives you a short test credits, so you have to be a profitable entity in order to benefit from the credits. Now that makes sense, and you’re very good policy reasons for that. But as more and more people want to participate in the renewable energy, you want to make sure that not only are they getting clean energy, clean energy for their homes, but they are, in fact, whether they can also invest in the clean energy sector, I think it will becomes more important to find ways to bring underserved communities, I was actually very happy to hear I think, in the last week, the government was announcing some initiatives to allow people to invest into community solar. For instance, right now, if you want solar on your roof, you have to have a home, right, with a big roof that can take on the solar, right. If you live in apartments, it’s harder for you to participate in it. So the community solar approach kind of came up to help solve that, where you can just say, okay, there’ll be a specific solar plant elsewhere and then you can sign on to get the benefit of that solar plan. But I think there are some government initiatives to make that a bit more easier to participate in. And I think we need to see more things like that we need to see with solar, we need to deal with wind, and especially offshore wind as well. So the offshore wind industry is going to create new, new businesses and make new manufacturing centers, and I think it will become important to make sure that people in the communities that are close to this investment are able to participate. And the reason I say that is I think it seems to go in cycles. And it is conceivable that at some point people will simply just demand it. Right. And so I think I think our industry just needs to do a better job of bringing people from underserved communities into the industry.
Catherine: Yeah, I mean, I totally agree from a consumption point of view. But also from a jobs point of view. This could be such a game changer for a lot of these communities from a jobs point of view. I mean, these are really good jobs.
Ike: Absolutely. They’re great jobs, they pay well, and they’re transferable to so many other things. I think as an industry, we will need to participate in the people who are already working on this, but I think we all need to do more.
Catherine: Yeah. So what advice would you give those looking to follow in your footsteps? So for example, did you have impactful mentors along the way, or other experiences that helped you enter into and succeed within the clean energy industry?
Ike: Yeah, no, absolutely. I’ve been very, very lucky to have worked with people that I admire. At my old firm I work with Kate Martin, who was the founder of the industry, I joke, but he’s definitely somebody that I’ve always admired. And in my experience, it’s important to learn, not just from people senior to you, but from people more junior. I think I used to be somebody who would print every single piece of paper. Just, that’s just how I would read, I would just print the document and read it until somebody who was in first year that’s not working for me, convinced me that you don’t need to do that. Right, you could just read the PDF and I started learning that; I started doing that. My point is just you can learn from anybody, whether senior or junior, so long as you’re being humble to pay attention to what people are actually saying. And that’s, that’s really what I’ll recommend to people.
Catherine: It’s such a good point because I think everybody always thinks of mentorship as somebody’s more senior than you or older than you, wiser than you. But there are a lot of wisdom people younger than you can bestow upon you as well.
Ike: Absolutely, absolutely. That and that’s absolutely true.
Catherine: It looked at things with a different lens, I guess. But um, well thank you so much for speaking to me today and I wish you the best of luck. Ike.
Ike: Thank you. Thanks so much Catherine. Appreciate it.