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

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.