Infradebt finances Impact’s 19MW Australian solar farm

The $25m solar project, financed solely by private debt investment, is expected to be a seed asset for Impact Investment Group’s next solar fund.

The 19MW Swan Hill Solar Farm, sponsored by Australian fund manager Impact Investment Group, has reached financial close with a financing package from Infradebt, a Canberra-based specialist fund manager.

Infradebt is providing A$10 million ($7.66 million; €6.6 million) and A$6.5 million of financing through its Infradebt Ethical Fund and a co-investment programme, respectively, to the solar farm, which has a total cost of A$32 million, chief executive Alexander Austin told Infrastructure Investor.

Austin said the firm has been working on deploying the fund’s capital in the past few months, since the debt vehicle reached a A$55 million first close in September with a cornerstone commitment from Future Super. In addition to continuing fundraising activities with consultants, the firm is looking to close two to three more deals, all in the renewables space, in the coming three weeks, he said, without disclosing further details.

The Infradebt Ethical Fund is specifically designed for institutional investors seeking an ethically-screened, fixed-income strategy. It has a target size of A$200 million, three quarters of which will be spent on financing renewable energy projects, both on a merchant basis and with a contracted PPA, and the remaining capital on social infrastructure.

The Swan Hill solar project, which will operate on a full merchant basis, is expected to become one of the seed assets in a new IIG solar fund, the details of which have yet to be disclosed.

IIG expected the solar plant to be one of the highest capacity solar farms in Victoria upon completion. “Regional Victoria is set to experience a boom in the development of renewable energy generation, with more than 11 large-scale solar farms currently committed or proposed for the state,” said IIG.

The fund manager launched its debut A$100 million IIG Solar Income Fund holding a single and final close last year. The fund has an expected internal rate of return of 10 percent.