ICG snaps up majority stake in ~300 MW solar PV and storage portfolio

Sydney-headquartered Infrastructure Capital Group (ICG) announced it will acquire a majority interest in a solar and energy storage portfolio comprising more than 40 operational and proposed PV projects from renewable energy developer Providence Asset Group.

ICG, which has about $3.5 billion of equity under management, said it had made an initial $100 million commitment to buy the projects, known as the Ginan Solar Portfolio, with the option to significantly scale the investment further to include co-located batteries and hydrogen. ICG said it will also look at opportunities beyond the initial development pipeline.

Under the terms of the transaction, to be made by ICG through its Australian Renewables Income Fund (ARIF), ARIF will take a majority interest in 16 operational solar sites in Victoria totalling 132 MWdc /73 MWac, with exclusive rights to develop a further 25 solar projects across New South Wales (NSW), totalling a further 156 MWdc /115 MWac.

The Victorian portfolio includes ~5 MW solar farms at Katamatite, Numurkah, Echuca and Stanhope while the development pipeline includes solar projects at Manilla, South Tamworth, Guyra and Gunnedah in NSW, taking the total portfolio to almost 40 ~5 MW solar farms across both states.

Each site consists of a ~5 MW distribution-connected solar PV plant which ICG said offers numerous advantages over large-scale projects, including speed of approval, construction, and connection. ICG said the small-scale plants also allow for flexibility in deploying various types of energy storage, including hydrogen and batteries.

ICG also said the offtake from the small-scale projects can be aggregated for ‘networked off-take’ under various power purchase agreements (PPAs).

An aggregated offtake agreement is already in place for 10 of the sites in Victoria with Providence last year signing a multi-year PPA with SmartestEnergy Australia, a subsidiary of Japanese investment giant Marubeni Corporation.

ICG managing director Tom Laidlaw said the acquisition of the Ginan Solar Portfolio also provides the company with “a low-risk opportunity to enter the green hydrogen market” through LAVO, an integrated hydrogen energy storage system and patented metal hydride storage technology developed by Providence.

Providence announced last year it would install the LAVO technology at its solar farms in regional Victoria after finalising a $33 million project financing agreement with the Commonwealth Bank (CBA).

Providence co-founder and chief investment officer Alan Yu said this week the operational solar farm at Stanhope will pilot LAVO’s hydrogen technology in Q1 2022 to assess the broader deployment of hydrogen storage technology and monitor the wider development of the industry.

“We are pleased to be working with the ICG team as they diversify into solar for the first time and look to incorporate new clean energy technology across this portfolio as well as ICG’s managed assets,” he said.

Laidlaw said opportunities may exist to deploy the LAVO technology not only across the Providence portfolio but also several ICG portfolio companies, assets and future acquisitions.

“We are delighted to be investing in and partnering with Providence Asset Group in what is a unique and scalable portfolio of clean energy generation assets,” he said.

“This is our first investment into operating solar assets, providing further diversification of the existing ARIF portfolio consisting of wind and hydro.

“Importantly it also provides the opportunity to assess long-duration hydrogen storage applications across ICG-managed assets.”

The Providence deal is ICG’s sixth transaction in the past 24 months, including its recent acquisition of the Meridian Energy Australia assets as part of a $729 million with global oil and gas giant Shell.

Following completion of the transaction, ICG assumed ownership of MEA’s portfolio of renewable energy generation assets, including the Burrinjuck and Keepit hydro power stations in NSW, the 131 MW Mount Mercer Wind Farm in Victoria and the 70 MW Mount Millar Wind Farm in South Australia, and development projects including the 20 MW/40 MWh Hume battery energy storage system (BESS) set to be installed alongside the 200 GWh Hume Hydroelectric Power Station in regional NSW.

ICG said the latest acquisition means it is now invested in operating renewable energy generation assets with a total capacity of 1,16 GWac across wind, hydro and solar assets while development pipeline more than 2.75 GWac of wind, hydro, solar and storage opportunities.