New solar investment fund seeks up to $300 million in ASX listing

Sustainable investment fund, New Energy Solar, is hoping to raise up to $300 million as it prepares to debut on Australian Stock Exchange – a move it hops will help to bankroll its big-solar buying spree in the US, and plans to do the same in Australia.

The company, which has headquarters in Sydney and New York, lodged a prospectus for its ASX IPO late last week, seeking at least $200 million from new investors – and up to $100 million more if the demand is favourable.

The company, which was established in 2015, currently owns four operating solar power plants in the US, and has entered into binding contracts to buy 14 more, totalling 130MW, also in America.

In a media release New Energy Solar said that once those 14 plants were operational, it would have a 345MW big solar portfolio, “underpinned by highly creditworthy off-takers and a weighted average PPA term of 16.4 years.”

But the company has also stressed that it has a mandate to invest globally, as markets develop, and is sure to have a firm eye on the local Australian market.

As reported last week month in the AFR, pre-IPO marketing for New energy Solar was led by Morgan Stanley, with utilities analyst Rob Koh promising investors a “Rare exposure to clean energy.”

“We believe economics and policy are directionally favourable to NES’ prospects for further deployment of capital,” he told clients.

John Martin, who is the CEO of New Energy Solar, said he was excited by the opportunities the global renewables market presented to, to both the business and to investors.

“The increasing cost competitiveness of renewable energy (as an alternative to fossil fuel generation) over the last few years was the impetus for the development of New Energy Solar,” he said in comments on Friday.

“In 2016, we undertook two capital raisings to raise $300 million and acquire four solar power plants in the US. Those plants are now operational and selling power under long term power purchase agreements to creditworthy offtakers.

“Through this public offer, we can consolidate our position as a leading participant in the new energy landscape and broaden our investor base.

“The business offers a unique opportunity in Australia to gain exposure to solar which offers attractive risk adjusted returns in the current low interest rate environment and positive social impact.”