The Clean Energy Finance Corporation, Australia’s government-run renewables financier, has invested A$75 million ($57.5 million; €53.4 million) in a renewable energy fund managed by Palisade Investment Partners.
The Palisade Renewable Energy Fund, which was launched last October, is looking to invest A$500 million in a renewables portfolio totalling more than 500MW. The CEFC said in October that it had pledged A$100 million of equity to the fund through a direct investment mandate, but a breakdown of the investment now shows that it comprises an A$75 million fund commitment and an A$20 million co-investment in a solar project.
The fund now has three seed assets in its portfolio, including the 131MW Waterloo and 94.5MW Hallett 1 wind farms in South Australia and the A$225 million Ross River solar farm in Queensland. The latter is PREF’s first solar asset, with the CEFC committing A$20 million as an equity investor in the project.
The 116MW solar scheme, expected to be completed in 2018, has secured a 13-year power purchase agreement with EnergyAustralia that is understood to be the largest single solar PPA in Australia to date.
The CEFC said the transaction marks the first in a series of large-scale solar investments the institution is set to make in Queensland this year. “Queensland will see an investment boom in large-scale clean energy projects this year, with the CEFC looking forward to providing on debt finance to some developments as part of its A$250 million large-scale solar programme.”
The financier added that the projects are nearing financial close and will be announced shortly.
The CEFC also hopes its fund commitment will help attract mid-sized and large institutional investors. “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 commitment to PREF follows a previous A$100 million pledge to Palisade’s broader renewable energy strategy last April. The strategy aims to finance an A$1 billion renewable energy portfolio, providing co-investment opportunities to CEFC alongside Palisade's fund investors and separate account clients.