Partners Group invests $200m in Taiwanese solar

Taiwan’s Cathay Life is also acquiring a minority stake in the 550MW platform through a vehicle managed by the Swiss-headquartered firm.

Partners Group has agreed to invest more than $200 million in a greenfield solar power platform in Taiwan that aims to develop a 550MW portfolio in the next three years. 

The Swiss-based firm will hold a controlling stake in the venture, with Cathay Life Insurance, Taiwan’s largest insurer, also acquiring a minority stake through a Partners Group-managed vehicle. 

The platform was set up in partnership with Sinogreenergy, a Taiwanese solar developer. It has already sourced a number of sites throughout Taiwan, suitable for the development of rooftop and ground-mounded solar plants, and has others in due diligence. Once completed, the portfolio will be supported by a 20-year power purchase agreement with Taiwan's state-owned utility. 

The deal comes shortly after the recently elected government of Taiwan stated its intention to triple the island's installed solar capacity to 20GW by 2025. 

“The newly elected government's solar energy targets, coupled with the re-zoning of idle agricultural land for solar ground-mount installation, will provide the necessary scale and support for our platform,” said Andrew Kwok, Partners Group’s senior vice-president of private infrastructure Asia-Pacific. 

Kwok told Infrastructure Investor that “the development of Taiwan’s renewables market has really kicked off in 2016, thanks to breakthrough developments in the past 12 to 18 months”.

Taiwan launched its renewable energy policy in 2009 with a focus on onshore wind. The development of solar power has so far been largely restrained to rooftop systems due to limited land supply. Last year, the Taiwanese government announced plans to turn polluted agricultural land into ground-mounted solar power generation zones. As of this April, 2,500 hectares of land in total have been included in this scheme. 

“There are several components supporting solar investment in Taiwan: policy support from the new administration and a world-leading solar manufacturing industry based there. However, the availability of land for ground-mounted plants is the factor that fell into place at the end of 2015, making now a good time to invest in the sector,” explained Kwok.

According to government figures, renewable sources contributed about 4 percent of the island's total power generation in 2015, while nuclear provided 14 percent. “We expect there will be an increasing trend of inbound investments in the solar power sector in the next few years,” said Kwok, adding that Taiwan aims to replace nuclear generation with renewables.

The investment marks Partners Group’s third solar platform investment in the last two years. Earlier in 2016, it invested $100 million in Silicon Ranch Corporation in the US. Two years before that, the firm invested in Japan Solar, which was established to build utility-scale solar power plants across Japan.