The future of a 315MW wind farm project in South Australia, and two 50MW solar farm proposals in Western Australia are up in the air after South African-owned Investec closed down its energy development business in Australia.
The closure was announced quietly last month as part of a restructuring of the bank that resulted in its closing four divisions in Australia, laying off up to 100 staff and redoploying others.
Among those to lose their jobs were the four-person power projects team headed by Mark Schneider, which was looking at a range of ground-breaking financing options for wind and solar projects in Australia.
This included the 50MW Mungari solar project in Kalgoorlie, where Investec had been on the point of negotiating a land deal, and the 50MW Chapman project near Geraldton, which already had planning approvals.
Acting CEO Ciaran Whelan has already said Investec is looking for a buyer for the Hornsdale wind project, which has permission to build a 315MW wind farm near Jamestown in South Australia’s Mid-North. It would be one of the biggest in the country and would cost around $800-$900 million to build. It is also considered to have one of the best wind resources in the country, with some estimates putting it at close to 50 per cent capacity.
Investec had already developed the 206MW Collgar Wind Farm in Western Australia and the 63MW Oaklands Hill Wind Farm in Victoria.
Schneider said last year that Investec was looking to deploy a range of instruments in the futures market, via swaps and forward sales, that could to fund such projects without having to rely on a power contract from a large utility. “If one was willing to take a bit of a risk, then there’s money to be made,” he said. He talked of creating a new entity that could become a “significant” player in the renewable market.
Any sale of Hornsdale is unlikely to be sealed until there is clarity over the future of the renewable energy target. The conservative Coalition, likely to win the September 7 poll, wants another review of the target to be held next year.
Financiers and developers say the uncertainty will bring any new projects to a standstill, because no contracts are being written and no financing provided.
Sources within the company said the decision by Investec to close its energy business partially reflected the uncertainty about the renewables outlook in Australia. Yet just last year, then CEO David Clarke had said South Australia stood out as an ideal investment destination. “We also believe South Australia will be a leading centre for commercial opportunities in renewable and low carbon intensity power and we are committed to growing our presence here,” he said at the time.
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