Infrastructure Capital Group (ICG), a leading Australian infrastructure manager, with A$3bn of equity under management and Shell Energy Operations Pty Ltd, a wholly owned subsidiary of Shell (together the Consortium) have agreed to acquire the Meridian Energy Australia Group (MEA), the Australian operations of Meridian Energy Limited, for a total consideration of A$729 million, subject to possible adjustments depending on the timing of completion.
Following the completion of the transaction, the Consortium will separate MEA, with ICG taking ownership of the wind, hydro and development assets; and Shell taking ownership of Powershop, MEA’s energy retail business.
As part of the separation, Shell has agreed to acquire all output from the wind and hydro assets under a PPA.
ICG and Shell formed the Consortium to leverage their combined strengths in asset management, generation and electricity and gas retailing. As 50/50 partners in the Neerabup power generation assets in Western Australia since 2008, Shell and ICG have a strong working relationship.
ICG will acquire the assets through its Australian Renewables Income Fund (ARIF). The acquisition of the MEA assets delivers ICG a mix of operating and development wind, hydro and BESS assets, which are highly complementary to the ARIF portfolio.
The transaction also brings a quality team of renewables experts with capabilities across asset management, operations, development, engineering, finance and legal. This capability complements ARIF’s investors’ mandate to strongly grow ARIF’s portfolio and create new opportunities in the sector.
Commenting on the transaction, Tom Laidlaw, Managing Director of ICG, said:
“We are delighted to have partnered with Shell to acquire this high-quality portfolio of renewables assets. Not only does this significantly scale our renewables portfolio but the addition of hydro comes at an important stage as we look to diversify with well-established, well-located assets.
“The proposed Hume hydro BESS presents a unique opportunity to develop what will be a meaningful milestone for renewables in Australia and something we hope to replicate elsewhere.”
Andrew Pickering, Chairman of ICG, said:
“A key attraction for ICG was Meridian Energy’s experienced team, who cover all capabilities of an integrated energy platform. The team comes with extensive development and operational expertise and a strong track record of enhancing the operational efficiencies of portfolio assets and investigating and developing feasibility studies for new assets.”
The transaction increases ICG’s operating renewable energy generation capacity under management to 875MW and expands the extensive development pipeline of opportunities.
The operational assets being acquired by ICG, include:
- Mount Millar Wind Farm, South Australia – 70 MW
- Mount Mercer Windfarm, Victoria – 131 MW
- Hume Hydro Power Station, Victoria/NSW border – 58 MW
- Burrinjuck Hydro Power Station, NSW – 34 MW
- Keepit Hydro Power Station, NSW – 7 MW
The development assets being acquired by ICG, include:
- Rangoon Wind Farm, near Glen Innis, NSW – 108 MW
- Hume BESS, Victoria/NSW border – 20 MW / 40 MWh
ARIF’s existing assets include:
- Hallett 4 Wind Farm, South Australia – 132MW
- Mumbida Wind Farm, Western Australia – 55MW
- Bald Hills Wind Farm, Victoria – 107MW
- Willogoleche Wind Farm, South Australia – 119MW
- 75% interest in the Australian Renewables Energy Trust (ARET) platform with ENGIE ANZ to develop a pipeline of over 2,500MW of renewable projects
The transaction requires Shell being granted FIRB approval. Financial close is expected early 2022.
ICG was advised by Azure Capital and Baker McKenzie.
The Meridian Energy transaction is ICG’s fifth acquisition in the past 24 months including Kinetic, Zenith Energy, TasGas, Willogoleche Wind Farm, and the establishment of the ARET renewable development platform.