Infigen Energy cuts losses on US wind business, turns focus to Australia

Australian listed renewables company Infigen Energy has announced the sale of its US wind business, after agreeing to an offer of $US272.5 million from newly formed local outfit, Primary Wind Power.

The price – which includes interests in 18 wind farms and a US-based asset management business – is considerably lower than the mooted value of $US400 million when the assets were talked of as a sale item as recently as January.

Infigen, which has been weighed down by debt and struggling to meet interest repayments, says the money gained from the sale will be used to chip away at that debt, and to help strengthen its Australian business, which currently comprises a total installed capacity of 556.6MW across six wind farms.

The deal – the result of a competitive tender conducted by UBS – follows the sale, last month, of Infigen’s US solar project pipeline, to an unnamed global solar company for $US37.9 million.

The company said the proceeds of the US wind sale, which remained subject to completion, will be to used reduce the company’s debt and get its retained Australian wind energy business on a stronger financial footing.

“Infigen has been assessing various options to improve the capital structure of our business and unlock security holder value for quite some time,” said managing director Miles George in a statement on Wednedsay.

“The sale of our US wind business is consistent with that strategic objective, represents fair value for security holders… and is a significant milestone on the path to improving the (company’s) future prospects.”

George said the outlook for Infigen’s remaining Australian business was “positive”, thanks to the investment certainty delivered by the recent passage of the amended RET legislation – and, presumably, despite the Abbott government’s bizarre assault on the sector.

“The amended target requires a near doubling of large-scale renewable energy capacity in the next five years, creating opportunities for profitable growth in the industry,” he said.

Earlier in June, Infigen – which suffered a 23 per cent fall in its Australian revenue in 2014 – in said it had commissioned the development of a new wind risk management facility that would better protect it against wind resource variability across its Australian wind farms.

The new wind risk hedge, purpose-built for Infigen by Swiss Re Corporate Solutions, will index the risk to actual energy production across the company’s entire portfolio of wind farms in South Australia, NSW and WA – an excess of 500MW of capacity – and pay Infigen a fixed amount per megawatt-hour for power not generated due to low wind.