Solar energy back in the spotlight as FRV and BlackRock offload their assets

Renewables in the spotlight. Picture: AFP

The parties that lined up to buy Engie’s Willogoleche Wind Farm and John Laing’s Australian wind farms are expected to be the main contenders for the latest selection of renewable energy assets soon to hit the market.

This month, Infrastructure Capital Group purchased Engie’s Willogoleche Wind Farm in South Australia and secured other development opportunities from Engie for $400m.

And as tipped by DataRoom on October 13, First Sentier Investors purchased John Laing’s Australian wind farms for STG157m, equating to $285m before disposal costs.

Macquarie Capital worked for John Laing. First Sentier was advised by JPMorgan and ICA Capital Partners on the deal announced on Monday.

The transaction sees First Sentier take control of the Cherry Tree and Kiata wind farms in Victoria, Hornsdale wind farm in South Australia and Granville Wind Farm in Tasmania.

Now a 49 per cent stake in the Australian solar farm portfolio owned by Spain’s FRV is on offer and it could be worth about $500m.

FRV, which is short for Fotowatio Renewable Ventures, describes itself as a leading global developer of large-scale solar power plants.

The assets on offer generate about 500 megawatts of power.

There is also an opportunity to invest in a development pipeline, and Credit Suisse is advising on the process.

The Spanish group recently tried to sell its entire global energy portfolio through JPMorgan, but struggled to find a buyer.

A stake in the Australian portfolio, which is the easiest to divest, is now on offer.

A big question is whether bidders will be satisfied with just a minority stake.

FRV owns seven solar power projects and developments in Australia, at least some of which contracted to Origin Energy.

The company is owned by Middle Eastern investor Abdul Latif Jameel, who bought it from private equity firm Denham Capital and others.

The other portfolio on offer consists of two Queensland solar farms owned by global investment management firm BlackRock, known as The Gretel Solar Portfolio.

This includes the Hayman Solar Farm, which generates 60 megawatts of power and Daydream Solar Farm, which generates 180MW.

Azure Capital is advising on the 90 per cent selldown of the assets which are expected to reap more than $300m for BlackRock.

The solar farms are understood to have had operational challenges that need to be addressed.

While solar assets are typically less appealing than wind farms, considered a more efficient energy source, renewable energy is gaining greater attention because of the fixed revenue stream that the assets generate.

Banks are keen to reduce their exposure to solar farms, pressuring owners to reduce debt and sell down their interests.

Other parties expected to line up for the assets are Palisade Investment Partners, Infigen Energy and UAC from the Philippines, which was recently outbid for Infigen.