Deal focus: Equis cracks Australian solar market

Despite clear advantages in governmental stability, natural conditions and a reliable judiciary system, Australia has remained conspicuously absent from the portfolio of one of Asia Pacific’s leading renewable energy investors. Equis Funds Group has established 47 projects across the broader region since 2010, but has delayed setting up shop down under citing a relatively difficult environment for securing power sale agreements.

“Australia benefits from a transparent land title system and an ability to secure land with few title holders. Elsewhere in Asia, a single project may involve hundreds of individual land holders claiming rights under vague ownership regimes involving a system of inheritance, thereby increasing the likelihood of disputes which delay projects or create uncertainty once construction has commenced,” says David Russel, Equis’ CEO.

“While Australia has lacked the mature concession and off-take regimes of other countries, this can be resolved through identifying reliable bilateral contract counterparties.”

The Singapore-based GP is making its first foray into the country with a A$400 million ($302 million) commitment to develop two 100-megawatt solar projects, each slated to begin construction this year. The Collinsville project in Queensland and the Tailem Bend project in South Australia could add a further 1,000 MW of capacity in the near term across a related 2,000-hectare holding.

The key to this entry was a power purchase agreement with local electricity retailer Snowy Hydro, which currently owns and operates 5,500 MW of generation capacity. The utility has agreed to purchase 100% of the power produced from the Tailem Bend for at least 22 years. Tailem Bend will be constructed alongside a Snowy Hydro-owned 29 MW diesel-fired power station, and the combined system is expected to be able to provide stable power any time of the day, year-round. Base load capacity is set to be further enhanced by a large-scale energy storage facility development at the site.

In more tangible terms, the two projects will supply enough power for about 63,200 homes and conserve 407 million liters of water per year that would otherwise be used at coal-fired plants. The offsetting of greenhouse gas emissions will equate to removing 83,900 passenger vehicles from the road.

The investment caps a development hot streak for Equis, with 33 utility-scale renewables projects completed during the past three years – a growth rate that equates to one new installation every five weeks.

“As Asia’s largest renewable energy independent power producer, there is material value-add in our economies of scale and purchasing power, experience, track record of successfully completing large renewable energy projects and depth of our management team,” Russel adds. “How this is applied for the benefit of our Australian projects is the ‘secret sauce.’”

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• Topics
• Australasia
• Infrastructure
• Cleantech
• Expansion
• Equis Funds Group
• Australia
• Growth capital