October 2016
We are pleased to announce that Palisade’s Renewable Energy Fund (PREF) has now officially launched and is open to commitments.
We estimate that over A$10 billion of investment will be required over the next five years in order to achieve the Government’s Renewable Energy Target (RET) to source 23% of all Australian energy usage from renewable sources by 2020 (currently estimated to be around 13-14%). Accordingly, there is a significant opportunity to generate attractive risk-adjusted returns across a large, visible and diverse pipeline of renewable assets.
PREF has a mandate to invest in Australian-based renewable energy assets, with a key focus on wind and solar assets. Key features of PREF include:
- Target size of A$500 million which will fund the acquisition and development of over 500MW of renewable projects (equivalent to c.A$1 billion of EV) over the investment period to 2020
- Seeking diversification in the renewable sector across energy sources, PPA counterparties, location and maturity of projects
- Targeting double-digit equity IRRs backed by long-term PPAs with the ability to invest in and receive higher returns from late-stage greenfield projects (pre-financial close)
- Seeded with two brownfield windfarm assets (total equity value of $72 million) providing forecast 5 year cash yields in excess of 9% and initial equity IRR in excess of 10.75%
Palisade is ideally positioned to source and secure a diverse range of assets at attractive valuations through both our in-house expertise, and our extensive relationships with energy retailers, equipment providers and developers. Over the past 12 months we have identified and targeted the top quartile of Australian greenfield renewable energy sites via an extensive in-house mapping and ranking program, and we are currently in advanced bilateral negotiations for a number of assets across both solar and wind representing c.A$750 million of EV. Palisade also recently completed the development of Waterloo Stage 2, including performing project management, EPC selection and negotiation, O&M negotiation and financing functions entirely in-house.
Construction of Waterloo Wind Farm Stage 2
Building on Palisade’s already significant prior experience in the due diligence, acquisition and ongoing management of renewable energy assets, we have recently further expanded our Investment Committee, as well as our investment management and asset management teams to add further specialist skills in renewables. Key additions to the Palisade team include:
- Steve Brown has 40+ years’ of experience working within the energy sector, and was recently responsible for the management of the Iona underground gas storage plant and the integration and management of Waterloo and Cathedral Rocks wind farms
- Clint Purkiss has over 12 years’ experience in the power generation sector and brings extensive knowledge of the Australian planning framework, a strong technical understanding of power generation infrastructure, and Australian energy markets more broadly
- Karen Gould joined Palisade from Macquarie Group in London where she provided construction finance to several large-scale solar PV plants in the UK
- Jonathan Liong joined Palisade from CEFC where he was responsible for the origination and execution of financing transactions in the renewables sector
- Steve MacDonald recently joined the Palisade Investment Committee as an independent member and has over 30 years’ industry experience including in the renewable and conventional power generation, transmission and distribution, telecommunications, water & waste water, roads & rail, public transport and the oil & gas sectors.