AUSTRALIAN infrastructure fund manager Infrastructure Capital Group (ICG) has acquired Bald Hills Wind Farm from Mitsui & Co (Australia).
The transaction reached financial close last week, with the asset moving to ICG’s utility portfolio, the $1.2 billion Energy Infrastructure Trust (EIT).
The 106.6MW, 52 Senvion turbine project between Tarwin Lower and Walkerville commenced operations in September 2015 with a 15 year offtake agreement with Alinta Energy, extending to 2030.
Andrew Pickering, ICG chairman and EIT portfolio manager, said the acquisition cements ICG’s place as one of Australia’s largest owners of renewable generation.
“We’re delighted to add to our utility portfolio another high quality investment that provides long term, stable and predictable cash flows, plus considerable environmental benefits,” he said.
“Bald Hills is a testament to the expertise of Mitsui & Co (Australia) in constructing a technically exceptional asset, working cohesively with government, market participants and leaseholders, while securing long term operational certainty.
“We are optimistic about the future of wind energy in Victoria where there is a sound balance of baseload and renewable energy production supported by a strong electricity network.
“The proximity of Bald Hills to the grid that supports the Latrobe Valley minimises the risk of lost output during transmission.”
Bald Hills joins other major wind farms owned by ICG, including Mumbida Wind Farm in Western Australia, and Wattle Point and Hallett Wind Farms in South Australia, with long term agreements with WA Water Corporation and AGL respectively.
The total installed capacity of the five wind farms under ICG management is 455MW, enough to power approximately 250,000 average Australian households annually.
Mr Pickering said ICG will continue to identify and assess renewable energy projects, but cautioned that the trend to shorter offtake agreements will make future investments more challenging for ICG whose superannuation fund investors and their members have long term investment horizons.
ICG’s investments have 15 to 20 year offtake agreements compared to contracts for new projects that are typically in the five to 10 year range.
“ICG can deploy capital across the whole infrastructure spectrum, through our EIT, Diversified Infrastructure Trust (DIT) fund and separate accounts, enabling us to be both patient and agile in ensuring investments deliver the best risk adjusted returns for our investors,” he said.