Infrastructure Capital Group (ICG), a leading Australian infrastructure manager with ~A$3.5bn of equity under management, today announced it will acquire a majority interest a solar and storage portfolio, known as the Ginan Solar Portfolio.
The interest will be acquired from Providence Asset Group (PAG), a developer, investor and manager of renewable energy projects across Australia with a focus on solar and energy storage systems.
ICG has made an initial commitment of c. $100m, with capacity to significantly scale the investment further across the development portfolio, co-located batteries and hydrogen. ICG will also look at opportunities beyond the initial development pipeline.
Under the terms of the transaction, to be made by ICG through its Australian Renewables Income Fund (ARIF), ARIF will take a majority interest in 16 operational solar sites in Victoria (total of 132MWDC / 73MWAC); with exclusive rights to develop a further 25 solar projects across NSW, totaling a further 156MWDC / 115MWAC.
Each site consists of a 5MW distribution-connected solar PV plant. Sub 5MW solar projects provide numerous advantages over large scale projects, including speed of approval, construction, and connection. They also allow for flexibility in deploying various types of energy storage, including hydrogen and batteries.
The offtake from these geographically diverse, small-scale projects, can be aggregated for ‘networked off-take’ under various PPAs. There is already an aggregated offtake agreement in place for ten of the sites in Victoria with Smartest Energy, a leading purchaser of independent generation and supplier of renewable electricity.
The investment also provides ICG a low-risk opportunity to enter the green hydrogen market through LAVO, an integrated hydrogen energy storage system and patented metal hydride storage technology developed by PAG. The operational solar farm at Stanhope will pilot the LAVO hydrogen facilities in Q1 2022, to assess the broader deployment of hydrogen storage technology, and monitor the wider development of the industry.
Opportunities may exist to deploy the LAVO technology not only across the PAG portfolio but also several ICG portfolio companies, assets and future acquisitions.
Commenting on the transaction, Tom Laidlaw, Managing Director of ICG, said:
“We are delighted to be investing in and partnering with Providence Asset Group in what is a unique and scalable portfolio of clean energy generation assets.
“This is our first investment into operating solar assets, providing further diversification of the existing ARIF portfolio consisting of wind and hydro. Importantly it also provides the opportunity to assess long duration hydrogen storage applications across ICG managed assets.”
Alan Yu, Co-Founder and Chief Investment Officer of Providence Asset Group, said:
“We are pleased to be working with the ICG team as they diversify into solar for the first time and look to incorporate new clean energy technology across this portfolio as well as ICG’s managed assets. Through PAG’s integrated LAVO technology, we offer broad clean energy solutions including long-duration hydrogen storage for a wide range of clients.”
Ginan Solar Portfolio’s current assets in Victoria include solar assets at:
ICG was advised by PwC Australia and Gilbert + Tobin.
ICG is now invested in operating renewable energy generation assets with a total capacity of 1,166MWAC across wind, hydro and solar assets and expands ARIF’s extensive development pipeline of opportunities to in excess of 2,750MWAC of wind, hydro, solar and storage opportunities.
The investment is ICG’s sixth transaction in the past 24 months including acquisition of the Meridian Energy Australia assets with Shell; its investment in ANZ’s leading EV bus operator Kinetic; its take private of Zenith Energy with Pacific Equity Partners and OPTrust; its majority investment in ENGIE and Mitsui’s Australian Renewable Energy platform; and its acquisition of TasGas.