The Foresight Group, a UK-based Global infrastructure and private equity investment group which has been investing heavily in Australian solar since 2017, has established the Foresight Renewable Energy Income Fund (Fund), a fund to invest in smaller-scale renewable energy projects between $5m-$30m, particularly solar PV.
This is welcome news considering the report released by the Clean Energy Council (CEC) this week which showed that investment into new renewable energies was slowing down as the nation approaches a post-2020 state-of-affairs lacking in any firm federal energy or climate policy.
The Fund looks to provide Australian wholesale investors with secure Australia-based smaller scale renewable energy projects which will provide “attractive, reliable and predictable income and will target a yield margin of 4.0% to 4.5% over the RBA Cash Rate.”
Kim Nguyen, Head of Australia at Foresight, said: “The Foresight Renewable Energy income Fund is innovative in a global sense. We hope it helps put Australia on the map as an innovator in the fast-growing green debt capital markets.” Nguyen is referring to the Fund’s pooling of capital into a series of CBI-Certified loans which provide potential Australian wholesale investors with unique access to green debt.
“Historically,” said Nguyen, “the big banks have overlooked smaller-ticket wind and solar projects, as they are generalists and lack the dedicated resources to identify and assess small-scale projects.” The banks might be too big to fail, but being too big isn’t always an advantage. Nguyen points out that the bank’s loss is the gain of infrastructure investment specialists like Foresight.
“There is no question that the surge in interest for green bonds and renewable energy infrastructure will only continue to intensify,” said Nigel Aitchison, Head of Infrastructure at Foresight, “Investors have shifted their focus to true-to-label investment solutions that directly contribute to the global decarbonisation agenda.”
The Fund looks to fit this agenda, “each loan will be individually tailored to meet a Sustainability Framework which has been certified by Climate Bonds Initiative (“CBI”) and verified by the Carbon Trust,” said Aitchison.
The Fund will lend to renewable energy generation and associated infrastructure projects.