RenewEconomy/Sophie Vorrath: UK solar fund buys up 110MW PV project that will power Melbourne trams

UK solar fund buys up 110MW PV project that will power Melbourne trams

By Sophie Vorrath on 29 September 2017
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A 110MW solar farm being built in Victoria as part of the state government tender to power the Melbourne tram network with renewables has been sold to a major British solar developer and asset manager, as more and more international investors start to tap the “fast developing and attractive” Australian solar market.

London-based Foresight Group said on Friday it had acquired the 110MW Bannerton Solar Project near Robinvale, on behalf of Foresight Solar Fund Limited, the South Korea-based KDB Infrastructure Investments Asset Management Co (“KIAMCO”) and Hanwha Energy Corporation (“Hanwha”).

Operating as Foresight Solar Australia, the investment fund concluded the deal under its joint venture with the solar farm’s owner – Syncline Energy – for a sum of $A5.5 million consisting of an initial payment and deferred additional payments over the course of the farm’s construction, according to PV Magazine.

The company said FSFL was taking a 48.5 per cent stake in the project alongside KIAMCO (48.5%), and Hanwha would have 3 per cent.

Foresight said the deal marked FSFL’s first overseas acquisition, and demonstrated its ability “to grow the fund in attractive new geographies.”

Syncline’s Bannerton Solar Farm was one of many that missed out on the ARENA big solar tender, but – as we reported here in August – managed to double its proposed size under the Victorian government contract.

That 10-year contract includes the sale of a proportion of the LGCs produced by the solar farm and a 17 year fixed-price power purchase agreement with retailer Alinta Energy, for a proportion of the electricity generated.

In addition, Bannerton will benefit from a debt facility provided by the CEFC during the construction and operational phase.

The 110MW project is expected to connect to the grid in July 2018. The acquisition remains subject to certain conditions being met, FSFL said, adding that in line with its low risk strategy, it would not be taking development risk on the project.

“We are pleased to have completed FSFL’s first overseas acquisition in Australia alongside the prestigious financial institutions and investors KDB KIAMCO and Hanwha, growing the fund’s portfolio to 20 assets with a capacity of 528MW,” said Ricardo Piñeiro, a partner at Foresight Group.

“The transaction launches FSFL’s international growth strategy into the fast developing Australian solar market which offers investors attractive risk adjusted returns.

“We’re particularly proud that Bannerton was successful in the tender to provide clean power to the Melbourne Tram network, supporting Victoria State’s target of 40 per cent renewable energy by 2025,” Piñero said. 
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