Impact reaches $55m first close with second solar investment fund

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Impact Investment Group announces “first close” on Solar Asset Fund after notching up $55 million in commitments.

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Australia’s Impact Investment Group has reached “first close” on its Solar Asset Fund – its second such PV-focused investment vehicle – after notching up $55 million in commitments.

Impact announced the milestone on Thursday as “a big vote of confidence in Australia’s solar future,” and said it was building towards the total Fund equity of $110 million.

Lane Crockett, IIG’s head of renewable energy infrastructure and the former head of Pacific Hydro, said the response from investors was an endorsement of the fund’s merchant strategy, of selling solar energy directly into the spot market.

“The Fund is forecast to yield an average of 8 per cent a year in the first five years which is a very attractive return in the current low interest rate environment and shows how robust the cash flows in solar projects can be,” Crockett said on Thursday.

“We look forward to welcoming further investors as we finalise the fundraising.’’

Chloe Munro, who is the independent chair of the fund, and who was a key advisor of the Finkel Review, said Australia’s energy market transition was based firmly on economic fundamentals.

“We know that the market needs more generation capacity and new renewables are best placed to meet that demand,” Munro said. “There is plenty of scope for future projects and this fund helps to keep growing the solar share of our energy mix.”

Last year, in October, Impact celebrated the formal opening of the 11MW Williamsdale solar farm in the ACT, one of three contracted by the ACT government.

Williamsdale, which came on line in early 2017, was the first asset in IIG’s original solar fund, which attracted $100 million in less than two days from high net worth individuals, self-managed super funds and one institution, Future Super.

Such was the success of that exercise, that Impact set to work on a second fund, based on solar assets being built on a “merchant basis” and a pipeline of other assets is also being put together.

Among the names signing up for this round are tech investor and co-Founder of Atlassian, Mike Cannon-Brookes – he of the Tesla Big Battery tweet that started it all – who is investing through his company Grok Ventures.

Ethinvest, Australia’s oldest and largest ethical investment advisory firm, also has a number of clients investing in the fund following due diligence by its subsidiary and specialist impact asset consultant, Australian Impact Investments.

As we flagged here, the first project for the IIG Solar Asset Fund is the Swan Hill Solar Farm which will provide clean energy for the equivalent of 6,300 average Australian homes.

Other solar farms in Chinchilla and Brigalow in Queensland are seed investments in the fund and over time other solar farms in NSW and Victoria may be added to the fund.

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6 Comments
  1. Chris Drongers 1 year ago

    8% investor return on after construction, operation, management and investment firm profit is a lot (about two and a half times the bank rate).
    This raises interesting questions;
    -What will we (residential, commercial , industrial ) be paying for power in 5 or ten years (how low can it go)
    – What will distribution and transmission costs be as more of the above consumers separate from the grid
    It seems to me that we are rapidly approaching a level of distributed generation where the/our discussions need to be at the next level of what the system will look like in a decade, as the present questions regarding the actual pv, wind, battery, hydro technologies seems to have been largely answered.

    • Hettie 1 year ago

      If grid operators are realistic, won’t it look like most except remote area dwellers will remain connected, with smallish batteries to capture midday generation for dark hour use, AND rooftop capacity well in excess of daily requirements, with battery software to allow timed export at periods of peak demand.

      The best of all possible worlds.
      This would apply for business as well as domestic clients.
      The major customers of industrial scale renewables would then be those whose premises are unsuitable for solar.

      Legislation is needed requiring all new builds to include, and all owners and purchasers of existing rental properties to retrofit for energy efficiency and solar system (if practical) including RCAC to replace all other forms of space heating, and heat pump water heating set for middle of the day operation, when solar output is highest and so too is ambient heat.

      Retrofitting should attract accelerated tax depreciation rates, but new builds that are energy efficient will pay for any increased building costs in short order through the reduced running costs. Buyers of existing substandard dwellings could be afforded low interest mortgage extensions, recognising both the value added to the property by these measures, and the reduction in household overheads.

      Better thermal performance of the majority of buildings will provide a huge social dividend. Pensioners struggling now with energy poverty would maintain better health, cost less in health care. Kids in low income homes could be better fed, learn more at school, have better employment prospects, because far less is spent on electricity.

      It all looks good to me, except for fossil fools who refuse to join the stampede to clean energy.

      • Chris Drongers 1 year ago

        I’ll go along with Hettie’s ideas, but would bet on the icecube in hell havibg a better chance of getting government support first. Thinking all the wailing from the backbench of the LNP when even world standards for vehicle and industrial energy efficiency are mentioned.

        • Hettie 1 year ago

          Under the present misrule, of course you are right. Under a Labor/Greens government, miracles just might be possible.

      • Paul Andrew 1 year ago

        I agree with your ideas but as Chris Drongers said it’s unlikely to happen unfortunately. We don’t need the government to mandate it though. We can choose to do it just like people are installing solar and batteries etc. There’s no reason why people can’t choose those options and some are starting to. If you own an investment property, there’s merit in making it more comfortable by making it perform better, produce energy and making your tenants/customers happier

        • Hettie 1 year ago

          Absolutely, Paul.
          Stop the heat leaks first. Then solar.

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