Palisade Investment Partners has reached financial close on the A$280 million ($206.45 million; €176.86 million) Granville Harbour Wind Farm, in Tasmania, with the announcement of a A$59 million commitment to the project from the Clean Energy Finance Corporation.
The wind farm is being funded entirely through equity commitments from the Palisade Renewable Energy Fund alongside the CEFC’s direct investment.
CEFC’s A$59 million commitment is split between A$25 million of direct equity and A$34 million of additional equity via the PREF, to which CEFC made a A$75 million cornerstone commitment in February 2017. It has a A$100 million direct investment mandate with Palisade.
The 112MW wind farm, which is located on a 1,200-hectare cattle farm on Tasmania’s west coast and is expected to commence operations in Q4 2019, represents CEFC’s largest investment in the state, as well as its first wind farm investment there.
Speaking to Infrastructure Investor, Palisade Investment Partners investment director James Hann said: “This project and the Ross River Solar Farm are examples of how we’re pursuing renewable energy opportunities in Australia.
“We look for projects like this that are in the late-stage of their development phase, rather than at the financial close or operational stage. That gives us greater influence over the key project agreements – like here, where we were heavily involved in negotiating the PPA with Hydro Tasmania. We also find there’s a bit less competition than for deals at the financial close stage, not to say that we’d ever rule out doing deals then.”
Palisade took control of the project in February 2018 when it acquired 100 percent of Westcoast Wind, the developer that undertook long-term wind monitoring at the site and acquired the necessary state and federal planning approvals for the scheme.
The asset manager had worked with Westcoast Wind prior to the acquisition, negotiating a long-term PPA for the project with Hydro Tasmania, which was agreed in September 2017. Palisade then continued the project’s development by finalising the agreements with TasNetworks for the wind farm’s connection to the electricity grid, as well as raising senior debt from ANZ Banking Group, MUFG Bank and Westpac.
“From our point of view, the PREF will continue to explore opportunities for deals in that sort of space,” Hann said. “We’re looking at a few more opportunities in wind and solar in particular at the moment.”
Granville Harbour Wind Farm is the fourth asset in the PREF portfolio, alongside operating assets Hallett Wind Farm and Waterloo Wind Farm, and the under-construction Ross River Solar Farm.
Granville’s addition will see the total generation capacity of the PREF portfolio reach approximately 500MW, or 50 per cent of Palisade’s 1GW target for the fund. The energy generated from the portfolio is enough to power more than 200,000 homes and abate 645,000 tonnes of CO2 emissions per year.
The open-ended PREF remains open to new commitments. Palisade declined to disclose how much has been raised for the fund to date. Its total return since inception to 30 June 2018 was 15.7 percent per annum, with a 12-month return of 16.2 percent, Palisade said in a statement.