French utility Engie and Japanese conglomerate Mitsui are seeking an investment partner for a new renewable energy platform in Australia, according to documents seen by Infrastructure Investor.
International Power (Australia) Holdings, a joint venture between Engie (72 percent) and Mitsui (28 percent), has sent a brochure to prospective investors advertising an opportunity to acquire a 50 to 80 percent stake in a proposed vehicle called the Australian Renewable Energy Platform.
AREP will be seeded with the 119MW Willogoleche Wind Farm in South Australia, which was commissioned in November 2019 and has been developed by IPAH.
The brochure, seen by Infrastructure Investor, details a further five IPAH assets that are expected to be transferred to AREP over time, immediately prior to their funding and construction.
These include the under-development 215MW Gregory Solar Farm and the 200MW Warhook Solar Farm, both in Queensland, and the 120MW Silverleaf Solar Farm in New South Wales. All three projects are expected to reach financial close in 2020-21.
Also in the pipeline is the Hills of Gold Wind Farm in NSW, which is under feasibility review and could have a capacity of up to 350MW, and on which IPAH is targeting a financial close by the end of 2021. The 46MW Canunda Wind Farm in Victoria, which has been operational since 2005, is also on the table.
IPAH is seeking a partner to commit capital “to fund development opportunities over a defined period at competitive, pre-defined investment returns”. It said the platform could be the first step in a broader, long-term relationship between the partner and IPAH that could extend beyond Australia and renewables investment.
IPAH also said it could offer the “unique ability” to provide offtake agreements for the renewables assets through its wholly owned energy retailer Simply Energy, or by leveraging Engie’s and Mitsui’s global customer base.
Interested parties will receive an information memorandum with detailed financial modelling early this year, with the deal expected to be completed by Q3.
Engie and Mitsui had not responded to requests for comment at the time of going to press.
The launch of AREP comes at an uncertain time for renewable energy investment in Australia, following years without a stable policy environment and concerns over the volatility of transmission loss factors.
Australian trade body the Clean Energy Council published analysis on 30 January showing that the level of new investment commitments to large-scale renewable energy projects in the country had fallen by more than 50 percent, from A$10.7 billion ($7.2 billion; €6.5 billion) in 2018 to just A$4.5 billion last year.
The council’s chief executive Kane Thornton said: “A continued slowdown in new investment will put greater pressure on reliability and power prices as Australia’s old coal-fired power stations continue to close. New investment is critical to replacing these coal-fired power stations and delivering on Australia’s emission reduction targets.”