The deal, which is being made via Palisade’s open-end Renewable Energy Fund and First Sentier’s portfolio company Atmos Renewables, will see the firms acquire their stake in the project from Morrison & Co. The Wellington, New Zealand-headquartered manager bought a 50 percent interest in Macarthur from Australian energy retailer AGL Energy for A$532 million ($379.8 million; €336.9 million) in 2015.
The size of the new deal has not been disclosed but is reported to be close to A$1 billion. The transaction is expected to complete in February.
Located in south-western Victoria, the project – which has been in operation since 2013 – is one of Australia’s largest renewable energy generators, capable of generating 420MW of energy. Macarthur’s energy output is contracted to AGL under a power purchase agreement until 2038.
Palisade and First Sentier will use their existing co-investment in the Granville Harbour Wind Farm to acquire the major stake in the project. Operational management of GHWF is undertaken by Palisade Integrated Management Services, which is expected to oversee GHWF’s interest in Macarthur through an expanded GHWF asset management agreement.
The acquisition will also utilise a common debt facility secured against both GHWF and Macarthur as part of its portfolio financing structure.
In a statement, Palisade executive director Simon Parbery said: “Macarthur is an attractive asset providing investors with exposure to fixed, long-term, contracted cashflows that are not exposed to volume or price risk. These features, in combination with Palisade’s bespoke acquisition structure, provide PREF investors with increased fund level returns and improved downside protection across the combined portfolio.”
Earlier this year, AGL announced A$1.9 billion of write-downs (paywall) related to legacy windfarm offtake agreements signed between 2006 and 2012, which included Macarthur Wind Farm.