Asset manager Palisade is packaging up five of Australia’s best known renewable energy assets into a single unit to beef up the amount of debt it can leverage against them.
The seed assets in the new investment vehicle, dubbed Intera Renewables, are the 95MW Hallett 1 and 270MW Snowtown 2 wind farms in South Australia, the 111MW Granville Harbour wind farm in Tasmania, the 420MW Macarthur wind farm in Victoria, and the 116MW Ross River solar farm in Queensland.
Intera does not include Palisade’s latest acquisition, the 49 per cent of Stockyard Hill it bought from Goldwind in November last year, which at 528MW is currently Australia’s largest operating wind farm. Nor does it include the 131 MWWaterloo wind farm in South Australia.
Palisade Investment Partners is already one of Australia’s largest renewable energy owners, but combining five of its six projects into one, 1 gigawatts (GW) capacity unit is expected to give it the financial heft to “take advantage of the intrinsic growth opportunities” says Palisade CEO Roger Lloyd.
“We are delighted to be announcing the launch of Intera at a time of unprecedented momentum within the energy sector,” he said in a statement.
“This momentum is being driven by a combination of the inevitable retirement of fossil fuel generation, coupled with ambitious net zero targets across the Australian economy, requiring significant investment in renewable energy generation, storage and transmission.”
The extra cash generated by the weighty unit will go on developing and building new renewable energy projects.
Steady relationship with CECF holds
The arrangement comes with the blessing of the likes of the Clean Energy Finance Council (CEFC), which will be a co-owner of Intera.
Palisade has raised $1.3 billion in financing against the combined assets, replacing existing smaller loans over each individual project, in order to get better debt terms and allow the asset manager to use the cash for “strategic purposes”.
“Intera’s material scale, geographic diversification and combination of long-term investment grade PPAs has provided a foundation for us to structure a portfolio financing with significant flexibility and debt capacity,” said Palisade executive director Simon Parbery in a statement.
Intera will be owned by Palisade’s Renewable Energy Fund (PREF) and Diversified Infrastructure Fund, as well as super funds HESTA and Aware Super.
The PREF was set up in 2016 in partnership with the CEFC, as a $600 million fund targeting brownfield and late-stage wind and solar project development. The CEFC sank $100 million of funding into the initial plan to buy or build 500 MW of projects in the years to 2020.
At the time, the fund was a welcome relief for an industry struggling to secure offtake deals and financing, due to the then-Liberal government winding back earlier renewable energy sector supports.
When Palisade paid $1.07 billion for the Snowtown 2 wind farm in 2019, it was the largest price for a project of its kind to date. It is also thought to have similar money, with partner First Sentier, for the Macarthur Wind farm in December 2021
Hallet 1 was the PREF’s first asset.
