6 February 2017
The Clean Energy Finance Corporation (CEFC) is looking to attract mid-tier and large institutional investors to support the next wave of renewable energy projects, with a $75 million cornerstone commitment to a new specialist renewable energy fund managed by Palisade Investment Partners (Palisade).
The Palisade Renewable Energy Fund (PREF) is looking to inject as much as $500 million in new investment to accelerate the development of a pipeline of clean energy projects.
CEFC Investment Funds lead Rory Lonergan said: "Australia requires very significant investment in new clean energy projects in order to meet the Renewable Energy Target. At the same time, institutional investors have a growing appetite for sustainable investment opportunities which can diversify their portfolios and meet the needs of their members. This new fund is specifically designed to meet these needs in a positive way that can really accelerate new investment in Australia's clean energy potential."
The PREF already has three seed assets in its portfolio. These include the Waterloo and Hallett 1 wind farms in South Australia, and the $225 million Ross River Solar Farm, near Townsville in Queensland. The CEFC has committed $20 million as an equity investor in the Ross River development, the CEFC's first direct equity stake in a solar farm.
Green Energy Markets estimates that Australia needs to build around 5,600 MW of new renewable energy capacity to meet the 2020 Large-scale Renewable Energy Target. According to the Australian Energy Market Operator, there are more than 100 new renewable energy projects in the pipeline across Australia, pointing to the scale of the investment task.
Mr Lonergan added: "To date there has been a distinct lack of investment product designed to attract Australian institutional investment into clean energy, leading to the sector being under-represented in this area.
"In many cases mid-tier institutional investors lack the scale to invest directly in projects. Through our cornerstone investment in the PREF, we are looking to unlock this investment potential and tap into the growing investor appetite for renewable energy investment opportunities, with both mid-tier and large institutional investors. By increasing the available equity, we can enable projects to be developed sooner, increasing our clean energy capacity and driving down development costs."
The PREF portfolio will focus on both construction and operating renewable energy assets, with the ability to also consider late stage development opportunities.
Palisade CEO Roger Lloyd said: "The CEFC's existing and now extended commitment through the PREF will support Palisade's renewable energy strategy. It will also attract further institutional capital to an existing diverse portfolio of renewable energy assets and match the tremendous pipeline of opportunities we are currently working on, including the Ross River Solar Farm."
The CEFC's commitment to the PREF is in addition to its earlier $100 million commitment to Palisade's broader renewable energy strategy. Through that strategy, the CEFC and Palisade are seeking to finance a $1 billion renewable energy portfolio, providing co-investment opportunities with larger institutional investors through Palisade's Direct Investment Mandate clients.
Palisade Investment Partners (Palisade) is a specialist, independent infrastructure manager that provides institutional investors with access to Australian infrastructure projects through tailored portfolios and co-mingled funds. Its multi-disciplinary and experienced team focuses on attractive mid-market assets that are essential to the efficient functioning of the communities and economies they serve. Palisade has experience in managing a range of Australian infrastructure, including airports, ports, rail, energy, gas pipeline systems, waste treatment plants, car parks, hospitals and other social infrastructure projects.