Octopus Investments Australia has launched a A$10 billion ($6.9 billion; €6.8 billion) platform to invest in renewable energy and storage, backed by cornerstone commitments from A$86.6 billion superannuation fund Hostplus and the Clean Energy Finance Corporation.
Octopus Australia, which is a subsidiary of the UK-headquartered Octopus Group, has simultaneously held a first close on two open-end funds that will each co-invest in a large Australian renewables portfolio. The firm declined to disclose how much it has raised so far.
The Octopus Australia Sustainable Investments (OASIS) Fund is open to institutional investors and the Octopus Renewable Energy Opportunities (OREO) Fund is open to wholesale investors, and will invest together in the energy and storage portfolio.
The firm’s 333MW Darlington Point Solar Farm in New South Wales, billed as Australia’s largest operational solar project, is the first asset to be jointly acquired by the funds.
The renewables platform will finance the entire lifecycle of renewable energy projects from development through to long-term operations, and aims to acquire wind, solar and storage assets. Octopus said it has a secured portfolio of A$3 billion for the platform to invest in, with a further visible pipeline of A$5 billion.
The investors in the OASIS fund include Hostplus, CEFC and Octopus’s own Sky Fund, a vehicle backed by the UK’s NEST and other European institutional investors. CEFC disclosed that it has made a commitment of A$75 million to the OASIS fund.
The platform will also support and fund projects generated by Desert Springs Octopus, an Indigenous-owned joint venture that Octopus launched to bring infrastructure investment opportunities to Indigenous Australians across the country.
‘Stars starting to align’
Speaking to Infrastructure Investor, Octopus Australia managing director Sam Reynolds said that “the stars are starting to align” for renewable energy investment Down Under following the election of the Labor government led by prime minister Anthony Albanese in May 2022.
“The federal government is now behind renewable energy, with coal assets coming to the end of their useful lives – there are just not investors for coal anymore, and insurance companies won’t even insure coal assets after 2030,” he said.
“All of these things that we’ve known as investors [for some time] are starting to get warmed up – it’s taken a while to get to this point, but having the federal government being supportive has been a good step forward for the energy market.”
CEFC and Hostplus first announced commitments to Octopus Australia in March 2022, when they revealed investments in an Octopus-managed platform that would help develop the Gippsland Renewable Energy Park, a multi-stage project to investigate the deployment of various technologies at utility-scale, including solar, wind, battery storage and green hydrogen.
In a statement on the latest investment, Hostplus chief executive officer David Elia said: “Australia, like the rest of the world, is on the cusp of a significant energy transition and we look forward to being involved in the entire life cycle of investment opportunities that this brings.
“Reflecting our commitment to both net-zero 2050, and to reconciliation, we are particularly excited to help support and finance projects developed by Desert Springs Octopus – aimed at supporting our indigenous communities to reduce their reliance on fossil fuels and help create other investment opportunities, new jobs, training, local procurement and cultural benefits.
“Importantly, this opportunity further diversifies our portfolio, an important aspect in the delivery of sustainable long term returns for our members.”