Infratil pivots to Asian renewables market, after $2 billion exit from Australia

ASX-listed infrastructure investor Infratil will target a burgeoning Asian market to rebuild its investments in renewable energy projects, following the sale of its multi-billion dollar Australian investment wing Tilt Renewables.

Infratil will establish Gurin Energy, which will build an initial portfolio of US$233 million (A$315 million) in renewable energy projects across the Asian region.

The new company will manage a portfolio of established as well as greenfield renewable energy projects, with the company bullish on the prospects being created by the Asia transition to renewables.

“Decarbonisation is essential to combat climate change and renewables is one of the single largest investment opportunities in history, with over US$4 trillion of investment in wind and solar assets forecast over the next decade,” Infratil CEO Jason Boyes said.

“Markets across Asian are characterised by combined tailwinds of demand growth, a growing commitment at national levels to decarbonisation, an increasing desire to reduce dependency on imported fuels, and to build self-sufficiency and security of supply.”

Infratil will make a US$133 million equity injection into the new venture, with an additional US$100 million in funding support being provided in the form of letters of credit.

Gurin Energy expects to invest $US70 million in its first year of operation through the acquisition of a range of ‘seed’ and early-stage assets in Vietnam, the Philippines and Japan.

Ultimately Gurin Energy will seek to amass in an initial portfolio of around 500MW of renewable energy projects located across the Philippines, Vietnam, Thailand, Indonesia and Japan.

The new company will be led by incoming CEO Assaad Razzouk, who said that it would be looking to replicate the successful portfolios built by other Infratil ventures in other regions of the world.

Infratil’s push into the Asian renewable energy market follows its lucrative exit from its main Australian renewable energy venture, Tilt Renewables.

Tilt Renewables’ Australian assets were acquired by the AGL led Powering Australian Renewables (PowAR) fund, in a deal worth NZ$3 billion (A$2.83 billion).

Tilt’s Australian portfolio included the 336MW Dundonnell wind farm in Victoria, the 101MW first stage of the Snowtown wind farm in South Australia and included the development of the 396MW Rye Park wind farm, which recently reached its final investment decision, to be located in New South Wales.

Boyes told an investor briefing on Friday that the company expects Gurin Energy to fill an investment and project development gap left by Infratil’s exit from Tilt, while delivering a greater level of diversification than was achieved by Tilt by targeting a much larger Asian market.

“The breadth of the Asian market allows us to diversify our risk profile, both from geographic and technology perspective,” Boyes said.

“As we have seen with Tilt Renewables and in North America and Europe, investor demand for these sorts of assets is only increasing.”