The Clean Energy Finance Corporation (CEFC) and Palisade Investment Partners (Palisade) have announced a new strategy aimed at accelerating the development of Australian renewable energy projects valued at $1 billion.
CEFC CEO Oliver Yates said the strategy, which involves funds managed by Palisade, meets the growing appetite from mainstream investors for renewable energy projects. At the same time it will help unlock much needed capital to support accelerated growth in the renewable energy sector.
“Australia has a considerable funding gap in new investments in renewable energy if we are to meet the Renewable Energy Target, Mr Yates said. “We expect this transaction will play an important role in catalysing new finance to help close that gap and accelerate our overall renewable energy capacity.
“Traditionally, institutional investors have tended to buy into built infrastructure projects. Through this strategy we are looking to attract investors at an earlier stage of project development, so we can more effectively accelerate the construction of commercially-viable projects. This means we can inject equity into projects at the time they need it most, so they can begin generating energy as soon as possible.”
This focus on financing renewable energy developments complements the CEFC’s extensive program to help drive clean energy investment in the broader infrastructure market. This includes both social and economic infrastructure assets, such as hospitals, schools, transport and rail.
The CEFC is allocating up to $100 million of equity to the initial $1 billion investment strategy. Palisade is committing up to $400m of additional equity through a combination of managed funds and its Direct Investment Mandate clients.
Among others, Palisade’s current Direct Investment Mandate clients include VicSuper, LGIAsuper and Qantas Super. NAB and Commonwealth Bank will work with the CEFC and Palisade to provide debt financing for these renewable energy projects.
Palisade Investment Partners CEO Roger Lloyd said Palisade would build a portfolio of renewable energy projects in excess of $1 billion, based on the investment mandates agreed with the CEFC and the other major investors.
“Palisade is well placed to work with our investors and partners to identify and commit to eligible renewable energy projects which can make a substantial contribution to Australia’s clean energy capacity,” Mr Lloyd said. “This strategy is capable of initially developing up to 500MW in solar and wind generation projects throughout Australia. Considerable time has been invested in identifying projects to which to apply this funding. We see renewable energy investments fulfilling our investment criteria and delivering robust and sustainable cash flows, which are important to our investors.”
Palisade has experience in managing a range of Australian infrastructure, energy, utility and social investments, gas pipeline systems, waste treatment plants, light rail and hospitals. Palisade already manages two wind farms and is currently developing an expansion to one of these, funded by early adopters LGIAsuper and Qantas Super.
“Sustainability is key for Palisade and our investors. We are pleased to offer an additional investment strategy that meets this objective and generates long-term secure returns,” Mr Lloyd said.
In addition to its Direct Mandates, Palisade is also launching a pooled renewable energy fund (Palisade’s Renewable Energy Fund, or PREF) to be launched in the second half of 2016 which will provide a broader range of investors with access to investments in renewable energy.
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.
VicSuper is a $15 billion superannuation fund that is open to the public. It has over 240,000 members and 21,000 participating employers.
LGIAsuper is the super fund for current and former Queensland local government employees and their spouses, and looks after $9.5 billion in retirement savings for almost 90,000 members.
Qantas Super is one of the largest corporate superannuation funds in Australia, set up in 1939 for employees and spouses. Qantas Super now has more than 32,000 members and about $7 billion in assets under management.
National Australia Bank Group (the Group) is a financial services organisation with over 12,700,000 customers and 35,000 people, operating more than 1,700 stores and business banking centres globally. Major financial services franchises in Australia are complemented by businesses in New Zealand, Asia, and the United Kingdom. NAB is the leading arranger of project finance to the Australian renewable-energy sector. NAB, as part of its climate change commitments, has made a commitment to undertake financing activities of A$18bn over the seven years to September 2022 to help address climate change and support the transition to a low carbon economy.
The Commonwealth Bank is Australia’s leading provider of integrated financial services having the largest customer base of any Australian bank and operating the largest financial services distribution network in the country. The Commonwealth Bank has been recognised as the most sustainable company in Australia and the most sustainable bank in the world in the 2016 Global 100 (G100) Most Sustainable Corporations Index.
Media release, 2016