Denham Capital taps JPMorgan for $1bn sale of renewable energy assets in Australia and Asia

Denham Capital’s Singapore-based Nexif Energy includes renewable energy assets in Vietnam, Thailand, the Philippines and Australia. Picture: AFP

Private equity fund Denham Capital has hired US investment banking giant JPMorgan for the sale of its $1 billion-odd portfolio of Australian and Asian energy assets.

Denham Capital’s Singapore-based Nexif Energy includes renewable energy assets in Vietnam, Thailand, the Philippines and Australia.

In Australia, it is developing the 154MW Snapper Point gas turbine peaking power plant 22km north west of Adelaide and the Lincoln Gap Wind Farm comprising 464MW of wind turbines near Port Augusta, also in South Australia.

The Houston-based Denham Capital invests in energy and resources and its portfolio is among a number heading to the market in the renewable energy space.

In recent weeks, Elliott Management Corporation hired Azure Capital and Bank of America for the sale of its Australian solar assets, thought to be worth more than $500 million.

Elliott owns Elliott Green Power Australia, with solar energy assets that generate more than 300 megawatts.

Its projects include the Susan River Solar Farm in Queensland that delivers 180,000MWh of electricity each year, along with the Childers Solar Farm and Nevertire Solar farms in NSW that deliver 144,000MWh and 265,000MWh respectively.

Elliott Management oversees two multi-strategy hedge funds that collectively have more than $US40 billion ($54.8 billion) worth of assets under management.

Investors include pension plans, sovereign wealth funds, endowments, foundations, funds of funds, high net worth individuals and families and employees of the firm.

The selling point for portfolios to such investors is that the assets are already contracted to the buyers of power, according to market experts.

Tilt Renewables, which has renewable energy assets in Australia and New Zealand, achieved a monstrous price when it sold to a consortium.

Queensland Investment Corporation, AGL Energy, Mercury Energy and The Future Fund paid more than $3 billion because of its development pipeline and contracted cash flows which are considered highly appealing to infrastructure investors, according to one market expert.

The other sales process afoot is the divestment by New Energy Solar of its Australian assets.

Final bids were due on May 24 and the expectations are that the Azure Capital-advised Banpu out of Thailand is best placed to secure the 110-megawatt Beryl plant and 55MW Manildra facilities in NSW.

The listed company, advised by Royal Bank of Canada, has a market value is close to $300m and also owns about 14 solar assets in the United States.

First Sentier, Palisade Investment Partners, Lighthouse Infrastructure, Dutch Infrastructure Fund and ICG have previously picked up renewable energy portfolios and they are expected to be in the mix for other assets on the market.

Other situations unfolding are a potential demerger of coal-related assets from within AGL Energy, advised by Macquarie Capital and Goldman Sachs, while there is also talk in the market that Origin Energy is assessing its portfolio.

Origin, which has been close to the investment bank UBS, comprises an electricity retail business, some coal fired power stations and oil and gas assets, including a 37.5 per cent interest in the Queensland APLNG project.

Other renewable energy assets for sale include BlackRock’s two solar farms in Queensland, known as The Gretel Solar Portfolio, which are on offer through Azure Capital and could be worth $300 million.

A 49 per cent stake in a 500MW Australian solar power portfolio that is owned by Fotowatio Renewable Ventures and could be worth about $500 million is also for sale.

First Sentier acquired John Laing’s Australian wind farms for $285 million before disposal costs and Infrastructure Capital Group bought Engie’s Willogoleche Wind Farm in South Australia and secured other development opportunities from Engie for $400 million.