Palisade Investment Partners and First Sentier investors are to invest around $1 billion to acquire Commonwealth Superannuation Corporation’s (CSC) 50% interest in the Macarthur Wind Farm near Hamilton in south-western Victoria.
Palisade is investing from its Renewable Energy Fund. First Sentier Investors is investing via investee company Atmos Renewables.
CSC chief investment officer Alison Tarditi said the super fund was divesting its stake to recycle capital into three development stage renewable energy projects.
The Macarthur Wind Farm comprises 140 three-megawatt capacity turbines. Operating since 2013, the project generates enough electricity to power more than 181,000 homes, averaged over 12 months.
The project is contracted to supply power to energy retailer AGL (ASX: AGL) until 2038.
Palisade and First Sentier are to acquire their stakes through their existing co-investment in the Granville Harbour Wind Farm in Tasmania. Palisade managed the late-stage construction of the Granville Harbour project prior to its commissioning in early 2020.
Granville Harbour Wind Farm is now managed by Palisade Integrated Management Services which is to be expanded to also manage the Macarthur Wind Farm currently managed by HRL Morrison.
Palisade said its investment in the Macarthur project will see the total generation capacity of its renewable energy portfolio surpass its initial target of one gigawatt. The portfolio will have capacity to generate enough power for over 530,000 homes and reduce CO2 emissions by more than two million tonnes annually.
Chief executive Roger Lloyd said Palisade was continuing to seek high quality investments for the Renewable Energy Fund portfolio.
Palisade is utilising portfolio financing for the Macarthur acquisition, extending an existing facility secured against Granville Harbour Wind Farm. This, it said, will optimise investment returns across the two projects.
Senior debt funding has been provided by a consortium comprising MUFG Bank, Mizuho Bank, Industrial and Commercial Bank of China and DBS Bank.
Macquarie Capital acted as financial adviser on the transaction, White and Case as legal advisor and Clayton Utz as tax advisor for both Palisade and First Sentier.
Palisade executive director Simon Parbery said Macarthur would provide investors in Palisade Renewable Energy Fund with exposure to fixed, long-term, contracted cashflows not exposed to volume or price risk. These features, in combination with Palisade’s bespoke acquisition structure, would provide investors with increased returns and improved downside protection across the fund.
Palisade Renewable Energy Fund invests in both operational and late-stage development renewable energy assets in Australia. The fund aims to provide investors with exposure to assets diversified across geography, technology, and revenue sources. The fund’s total return since inception in 2016 to November was 11.5% per annum including income returns of 7.3% per annum.
Image: Macarthur Wind Farm.