Macquarie targets big solar in new global alliances

Macquarie Capital, the corporate advisory and capital markets arm of Macquarie Group, has formed a joint venture with Maeda Corporation to invest in infrastructure and renewable energy in the latter’s home country of Japan.

The JV, announced on Tuesday, will have an initial focus on large-scale solar projects, capitalising on incentives recently introduced by the Japanese government to encourage the development of renewable energy and reduce dependence on nuclear in the wake of the 2011 Fukushima disaster.

Solar has been on Macquarie Group’s radar for a while now, with its European analysts earlier this year describing the rapid deployment of low-cost PV as an unstoppable force, with or without subsidies.

Japan, meanwhile, became the fifth country in the world to reach the 10GW mark of cumulative PV capacity just last month, completing 1.8GW of projects in the second quarter of this year – most of which (1.4 GW) came from commercial installations. According to government sources, almost 3,700MW of renewable energy capacity has been added in the 12 months to June 30, since a feed-in tariff was introduced.

The Macquarie-Maeda alliance is expected to be up and running by the end of 2013 and have 300MW of generation capacity in the works by the end of 2016, with combined projects worth ¥100 billion (US$1.02 billion). For every project, the companies will invest in separate special-purpose vehicles which will raise project finance from lenders. In the long-term, the companies intend to branch into other sectors, including wind power.

Meanwhile, a similar alliance has been struck between Macquarie Capital and GE, the two companies announcing – also on Tuesday – that they will joining forces to cater to the growing global demand for infrastructure funding and development; also with a focus on renewable energy and power delivery.

In a sign that the solar juggernaut might finally be coming to Australia, the agreement was signed in Sydney, with GE vice chairman John Rice describing the global demand for renewable energy infrastructure, among others, as “huge and growing all the time.”

“One of the biggest challenges we face with our customers is how to connect capital to these large-scale projects,” Rice said “Today’s announcement is a step forward in bringing some of these important projects to life.”