The Australian-based and locally listed New Energy Solar says it has sold its two Australian solar farms, and will now focus entirely on the US market, where it expects record installations in 2021 thanks to that country’s support for investment in renewable energy projects.
A week after lamenting the state of Australia’s regulatory and policy environment – which it described as “not conducive”, New Energy Solar says it has sold the 87MW Beryl and 46MW Manildra solar farms to Thai company Banpu Australia for $288.5 million.
The company had reduced the value of its two solar assets because of transmission constraints and other factors, but said it managed to secure a price above its new net asset value for Beryl, but nearly 20 per cent below in the case of Manildra, due to the impact of ongoing transmission constraints.
New Energy Solar says its equity proceeds would be $105.4 million, being $62.5 million for Beryl and $42.9 million for Manildra. The net asset value of these plants at December 32, 2020 was A$60.0 million and A$50.5 million respectively.
New Energy Solar announced last year it would seek a buyer for its two Australian solar assets because it said their true value was not being reflected in its listed market price.
It will now focus on the US, “a renewable energy market that is growing quickly,” it said in a statement.
Last year, it said, solar PV installations in the US pumped 27 per cent to a new record, and is expected to grow again in 2021 to around 17,500MW.
“NEW expects that the environment for renewable energy in the United States will continue to be supportive of investment in renewable energy projects,” it said.
The company’s financial advisor is RBC Capital Markets, which will likely pocket a major part of the $3 million in advisory costs. The sale is subject to foreign investment review, but is expected to be concluded within two months.
The net proceeds will be used to repay group debt and reduce gearing below the long-term target of 50%, and to buy back New Energy Solar securities.
New Energy Solar is one of a number of renewable energy players looking to exit the Australia wind and solar market, with Elliott Green Partners putting its portfolio of solar farms up for sale, and FRV reportedly seeking an equity partner for its eight-solar farm portfolio.
UK-based John Laing has already sold its Australian wind farm portfolio and is likely to sell its two new solar farms in NSW will be put up for sale next year once transmission issues are clarified.
There are also reports that Nexif is putting its renewable energy assets up for sale, including the Lincoln Gap wind farm and battery in South Australia.
See also RenewEconomy’s large scale solar map: Large Scale Solar Farm Map of Australia