Infrastructure Capital raises $109m for Australia renewables fund

The Australian Renewables Income Fund (ARIF) has now raised A$540 million in total, which is said to rank it among the largest vehicles of its kind in the country. The fund will continue to accept investments throughout 2019. According to a statement, this is CEFC’s largest equity investment in the sector to date, representing almost 40% of the financial institution’s renewables equity portfolio.

ARIF was launched last year with a view to investing across solar, wind, hydro, waste management, and battery storage in Australia and New Zealand. Investments to date include the 100% acquisition of two wind farms in Victoria and Western Australia, as well as a 40% stake in a wind farm in South Australia. All three have secured offtake arrangements with local utilities.

Infrastructure Capital was founded in 2001 and claims some A$1.8 billion in assets under management. In addition to ARIF, the firm manages the Energy Infrastructure Trust, which has made nine investments including a number of power stations, a stake in a container terminal, and a coal exporting facility. A third fund, known as Diversified Infrastructure Trust, holds a 50% stake in an airport at a major mining port. 

Much of the momentum in Australia’s renewables space traces back to early 2015 when a bi-partisan agreement on the government’s clean energy targets suggested the end of a longstanding regulatory impasse. Sentiment has wavered in the more recent term, however, with the scrapping of an emissions reduction policy known as the National Energy Guarantee.

Australia has experienced five prime ministerial changes since 2010, stoking uncertainty around the long-term political needs of renewables. The Clean Energy Council (CEC), an industry lobby group, has expressed concerns about a lack of cohesion in policy at the national level, noting that Energy Minister Angus Taylor has alluded to underwriting new coal-fired generation.

CEC has nevertheless tracked a doubling in renewables sector investment during 2018 to A$20 billion across 80 projects. Andrew Pickering, CIO of Infrastructure Capital, said that more than 4 gigawatts of wind and solar projects were due to reach commercial operation over the next 24-36 months, requiring an additional $5 billion of investment.

Private equity participation is expected to remain limited due to challenges around intellectual property for technology and deflationary pressures on real infrastructure assets. Recent activity includes a commitment by Partners Group to invest A$700 million in platform called Grassroots that will operate in partnership with local project developer CWP Renewables.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Australasia
• Infrastructure
• Fundraising
• Australia
• Cleantech
• energy