Privately owned funds management company Impact Investment Group has bought an 11MW solar project in the Australian Capital Territory as part of a major push into the Australian solar market that is attracting investors from across the world.
Impact announced on Wednesday that its newly created Solar Development Trust has bought the 11MW Williamsdale solar project that was one of the three winners of a 20-year feed-in tariff from a reverse auction tender conducted by the ACT government in 2013.
The purchase is the first significant one in the solar sector by the $400 million funds management group, which is looking to raise tens of millions to build a broad portfolio of solar assets across Australia. It also comes as other investors, both local and international also enter the solar market.
Last month, Australian infrastructure group Lighthouse Infrastructure Management announced plans to raise $100 million for solar investment, while Flexigroup raised $50 million in the first “green bond” of its type in Australia in an issue backed by the National Australia Bank.
Impact Investment CEO Chris Lock says the group, only established 3.5 years ago, is attracted to the solar sector by the reliable nature of the investment.
“It has a predictable source of energy with a fixed price attached to it. So it’s got a reliable cash flow,” Lock told RenewEconomy in an interview.
“We are attracted to solar as part of a bigger picture. We believe in the future of renewable energy and the need for renewable energy. This solar asset has 20-year committed cash flows, so assets like these are attractive to all investors, not just those with attraction to renewable energy.”
Lock says Impact is also looking to create a solar investment vehicle to attract at least $50 million from high net worth individuals and other investors.
Impact will take the $30 million Williamsdale project on balance sheet, and will then likely to sell it into the new solar investment vehicle. It has hired Lane Crockett, the former Australia head of Pacific Hydro, to lead its renewable energy investment team.
The Williamsdale Solar Farm is located 20km south east of Canberra, ACT, and is predicted to generate 21,901MWh of clean electricity in its first year of operation, equivalent to the annual consumption of around 3,600 homes.
The solar farm will feature 30 hectares of solar panels using single axis tracking technology. It will be built by privately owned German company ib vogt. It will be completed and into full production later this year.
The Williamsdale Solar Farm was formerly known as the OneSun Capital Solar Farm, and faced controversy after its initial location was abandoned after protests from the local community at Uriarra.
Lock said that ideally Impact would not be a developer and constructor, but at this stage in the evolution of the Australian solar industry, had no choice because there were few other assets available.
Impact is also a co-onwer of the small three-turbine Chepstowe wind farm in Victoria, and plans to build a 400kW rooftop solar array on its recently purchased Gold Coast Surgical Hospital in the Gold Coast. Much of its assets to date have been in property, including the Quicksilver shop in Byron Bay, which also installed a large solar array.
Impact Investment is owned by Lock and Small Giants, the family office of Daniel Almagor and Berry Liberman. It describes itself as “an active and ethical manager” that benchmarks its fees to the longterm performance of its assets. It is a member of the Responsible Investment Association Australasia.
“Investment in solar power is at the core of the positive environmental and social impacts that are important to us, as solar power provides safe, clean, very low emissions power generation,” Lock said in a statement.
The commitment to begin construction later this month was welcomed by ACT climate and energy minister Simon Corbell.
“The … solar farm is Canberra’s third and the Monaro Highway is beginning to become the Solar Highway, with all three current farms along the stretch of highway between Mugga Lane and Williamsdale,” he said in a statement.
The Williamsdale project includes 7 megawatts eligible for the ACT Government’s large-scale feed-in-tariff support, with the remainder supported by up to 18 medium feed-in tariff entitlements.
Giles Parkinson is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the former editor of Climate Spectator.