Infrastructure Capital Group makes first brownfield solar investment

The firm’s investment in the Ginan Solar Portfolio marks ICG’s first move into operating solar assets and will further diversify its renewables portfolio.

Sydney-based Infrastructure Capital Group is set to acquire a majority stake in Providence Asset Group’s portfolio of Australian solar projects.

Infrastructure Investor understands the deal, which is being made through ICG’s open-end Australian Renewables Income Fund, will see the firm acquire roughly two-thirds of the portfolio known as the Ginan Solar Portfolio. The firm has made an initial commitment of around A$100 million ($72 million; €63 million).

The portfolio consists of 16 operational solar projects in Victoria, with a further 25 solar projects to be developed across New South Wales within the year, ICG managing director Tom Laidlaw told Infrastructure Investor.

The investment marks ICG’s first foray into operating solar assets and is expected to further diversify the ARIF portfolio, which currently consists of wind and hydro assets.

According to Laidlaw, the relatively small size of the portfolio’s assets provides an advantage over larger, industrial-sized projects and was a major factor in ICG’s decision to invest in the portfolio.

“As the projects are sub-5MW, [so] they are all exempted from wholesale connection rules and connection requirements, which allows it to be built and connected into a transmission or distribution system… You do not need to go through the approval processes that the larger projects have to go through, which de-risks [the investment and the rollout] a lot. It is a lot easier to get projects approved and grow,” Laidlaw said.

“On the flip side, growing 5MW at a time is not really our core business, which is why we partnered with Providence, as they’re well placed to roll these out.”

An aggregated offtake power purchase agreement is currently in place for 10 of the existing solar projects with UK energy company Smartest Energy.

Laidlaw also highlighted Providence’s innovative hydrogen energy storage technology LAVO HEOS (Hydrogen Energy Storage System), which is soon to be trialled on one of the solar farms within the Ginan Solar Portfolio, as an opportunity for ICG to access the green hydrogen market.

Co-developed by Providence and the University of New South Wales, the storage solution is expected to be deployed across the wider Providence portfolio. In addition, as part of ICG’s partnership with Providence, ICG will have priority access to utilise LAVO HEOS across the firm’s entire renewable energy portfolio.

In November, ICG partnered with Shell to acquire the Meridian Energy Australia Group for A$729 million. As part of the deal, the firm added three operational hydro power stations and the Hume Battery Energy Storage System project to its ARIF portfolio, as well as two operating wind farms in South Australia and Victoria and one development wind farm in New South Wales.