Fund nears financial close for wind and storage projects, with Victoria Big Battery extension first to go

The listed investment fund HMC Capital expects to reach financial close on its first wind and big battery projects over the next 12 to 18 months, with a proposed extension of the Victoria Big Battery near Geelong likely to go first.

In a presentation to investors this week, HMC says its energy transition platform is looking to reach FID on 2.3 gigawatts of new capacity, largely through development assets that it bought from Neoen Australia after the company’s sale to Brookfield.

HMC expects to finalise an investment deal from its own global funds backer, KKR, which will give it the financial juice to go ahead with its first green fields projects.

Top of the list is the around $550 million extension to the Victoria Big Battery, known as Moorabool or VBB2. The original VBB was for a while the biggest battery in Australia, sized at 300 MW and 470 MWh, and the second stage is expected to have a lot more storage – 300 MW, and 1,200 MWh.

HMC has indicated it hopes to reach FID on the battery proposal by the end of calendar 2026, which would be no surprise given the relative ease of obtaining finance for big batteries, and the ongoing difficulties with big wind projects.

The main wind asset that HMC is developing is the Kentbruck project in Victoria, which has landed a potential underwriting agreement through the federal government’s Capacity Investment Scheme, and finally won conditional planning approval earlier this year after a challenging process.

HMC has set aside around $1 billion of equity for the near term projects. It has a total pipeline of around 5.7 GW, including development assets in Queensland and South Australia, that were inherited through its purchase of battery storage developer Store.dot.

The fund puts the total value of those likely developed projects at around $10 billion. HMC is targeting a return on equity of more than 20 per cent from its investments.

Planning approval for the VBB extension has been received, and in a presentation at a site visit in late March HMC said grid connection is being negotiated and a battery supplier is yet to be finalised. The original VBB was built with Tesla Megapack technology.

It revealed at the time that half the capital had already been committed for VBB2, with KKR coming up with 90 per cent of the equity, and with a target of 60 per cent debt financing.

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