Spark’s buyer list whittled down

The buyer list for Spark Infrastructure’s renewable energy business is down to five.

Five parties are understood to have been short-listed to buy Spark Infrastructure’s renewable energy business, with Iberdrola and APA Group believed to be in the final mix.

The operation is up for sale through Lazard.

While Origin Energy is understood to have lobbed a final offer, it did not make it through to the last round.

It comes as Brookfield remains on track to buy the Australian listed energy company for $15bn with EIG, as the pair put the finishing touches on the transaction.

Market observers questioned whether it could be touch and go when it came to a deal, given level of market uncertainty with the fallout from US bank collapses.

Spain’s Iberdrola is the largest renewable energy operator in the world and has about EUR$154bn worth of assets.

In Australia, it is a sizeable player following the purchase of Infigen Energy in 2020.

It is understood that the Spark sale process for the renewables operation had attracted strong interest, with parties prepared to pay up for the opportunity to own the assets.

Spark Infrastructure was purchased by Kohlberg Kravis Roberts, Ontario Teachers and PSP in 2021 for $5.2bn.

The unit was always expected to hit the block following the buyout because it is non core to the overall operation, and some have suggested that APA may be working with adviser Ironstone Capital.

The main asset within Spark’s renewable energy unit is its Bowmen Solar Farm, estimated to be worth about $200m.

The 100 megawatt farm is located in Wagga Wagga and received development consent in October 2018.

It began operating in the second quarter of 2020.

It also has the Dinawan Energy Hub, a hybrid wind, solar and storage project with a generation capacity of up to 2.5 gigawatts in the Riverina region in the NSW South-West Renewable Energy Zone.

Other assets are the Mallee Wind and battery storage project with a capacity of up to 1GW in the Wentworth Shire in the NSW South-West Renewable Energy Zone, the Yorke Peninsula Energy Hub – a 600 to 850 megawatt community-initiated development on South Australia’s Yorke Peninsula – and the Mates Gully Solar Farm that is a proposed 160 megawatt solar and battery storage development 30km east of Wagga Wagga between Borambola and Tarcutta on the traditional lands of the Wiradjuri people.

Spark’s core business consists of a 15 per cent stake in NSW electricity transmission network Transgrid, a 49 per cent stake in South Australia Power Networks and a 49 per cent interest in Victoria’s CitiPower and Powercor, known as Victoria Power Networks.

Before Spark was privatised, in the six months to June the Bomen Solar farm made $4.7m of earnings before interest, tax, depreciation and amortisation.

The $13bn Australian listed gas pipeline owner is known to be on the acquisition trail as part of an effort to diversify its core operations, buying the Basslink power cable last year for $773m.