Macquarie reveals five-year plan for massive investment in 20GW renewables

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While Morrison obfuscates on climate in New York, Macquarie announces mammoth plan to finance 20GW of new renewables in five years.

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Australian based Macquarie Group has announced plans to develop a massive portfolio of clean energy projects, with a goal of investing in 20GW of new projects across the globe and will be channelled through its recently acquired subsidiary, the Green Investment Group.

The company said that it would develop the 20GW clean energy pipeline in just five years, with investments to be made in new projects, rather than the acquisition of existing projects. The commitment is to support the completion of projects across the world, building upon Macquarie’s existing portfolio of clean energy investments across Australia and Europe.

Macquarie’s plans were announced at the Bloomberg Global Business Forum in New York by the company’s Managing Director and CEO Shemara Wikramanayake.

“Over the last decade we have played a leading role in facilitating the shift towards renewables, with a particular focus on trying to address the various challenges that remain to full transition, including the need for a stronger pipeline of projects and integrating these with energy grids,” Wikramanayake said.

“We are increasingly broadening our focus by seeking new solutions to emissions reduction across agriculture, waste and real estate and working to ensure our infrastructure investments are more climate resilient.”

Macquarie hopes to use the existing corporate relationships it has built through the Green Investment Group to secure power purchase agreements for each of the new projects under the 20GW plan, which will help to underpin the financial viability of the projects.

The investments would almost double the amount of renewable energy capacity that Macquarie has financed since 2010. Between both Macquarie and the Green Investment Group, around 22GW has been financed since 2010. Setting themselves a five-year deadline to support investment in an additional 20GW represents a significant ramping up of clean energy investment activity by the group.

In August, Macquarie successfully raised A$1 billion in new shareholder capital through an institutional placement, with the bank citing an active period of investment in renewable energy projects as being one of the factors making the capital raise necessary.

Macquarie has said that the portfolio will include up to 4GW of clean energy projects in emerging markets, outside of OECD member countries.

Macquarie will seek to build upon its partnerships with the United Nation’s Green Climate Fund to deliver investments into developing and emerging economies, including assisting with the establishment of a new government funded green bank in Mongolia.

As part of the announcement, Macquarie said that it would support the Climate Finance Leadership Initiative, formed in January by former New York mayor and UN Special envoy for climate action Michael Bloomberg. The initiative will seek to strengthen the investment environment in emerging economies, with Macquarie serving as a founding member of the initiative.

The Green Investment Group was originally founded by the UK Government in 2012 as a vehicle for the investment of government funds into green infrastructure, serving a similar role off “green investment bank” to that of the Australian Clean Energy Finance Corporation.

The UK Government sold Green Investment Group to Macquarie Group in 2017 for £2.3 billion (A$4.2 Billion).

Last year, Macquarie also acquired Conergy Asia, giving the firm access to a team of 88 solar project experts and a development pipeline of more than 500MW of solar projects across the Asia-Pacific region, including the Lakeland solar and storage project in north Queensland.

Macquarie has not been timid to make substantial plays in the clean energy space. In August, the firm acquired an almost 50 per cent stake in the East Anglia ONE offshore wind development, for £1 billion (A$1.77 billion).

At 714MW the East Anglia ONE project is set to become one of the UK’s largest offshore wind projects.

Macquarie also announced that it would join the RE100 initiative, committing to ensuring that all of the electricity used to power the firms offices and data centres will be sourced from 100% renewable electricity by 2025. This follows similar pledges by three of Australia’s big four banks, including ANZ who announced they were joining RE100 earlier this week.

Macquarie’s announcement is another example of Australian companies taking advantage of the goodwill being generated at the UN climate action summit underway in New York, despite the complete disengagement of the Australian Prime Minister.

Macquarie’s 20GW plan joins the commitment from Atlassian co-founder Mike Cannon-Brookes who used the summit to confirm his financial backing of a $25 billion plan to link Singapore and Australia with an undersea electricity cable and up to 10GW of solar power to be built in the Northern Territory.

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