HMC Capital to acquire Neoen’s Victorian renewables portfolio

HMC Capital will buy Neoen’s wind, solar and battery assets in Victoria, but warns of two barriers to reaching the nation’s ambitious renewables goal.

HMC Capital’s head of energy transition Angela Karl and managing director David Di Pilla. Picture: Jane Dempster

The lagged build-out of the nation’s transmission network, and the huge scale of construction resources needed to deliver future wind, solar and battery projects, remain the biggest obstacles to reaching the federal government’s ambitious 2030 renewables targets, according to the woman spearheading HMC Capital’s bullish investment in Australia’s energy transition.

Angela Karl, a former partner at QIC Global Infrastructure and founding director of Tilt Renewables, moved to David Di Pilla’s HMC Capital in February to head up a new fund seeking to raise an initial $2bn for investment in renewables and decarbonisation projects across Australia.

On Thursday, the fund secured Neoen’s wind, solar and battery assets in Victoria for $950m, including four operational assets and a pipeline of six development projects across the state.

The sale of the Victorian portfolio was required by the ACCC as part of its approval of Brookfield’s takeover of the French renewable energy developer.

It includes 652MW of operational wind, solar and storage assets – including Victoria’s “big battery” near Geelong and the Bulgana wind farm – and a pipeline of more than 2800MW of generation and storage projects including the Moorabool battery and Navarre wind farm.

Ms Karl described it as a “significant milestone” for HMC’s energy transition fund, which was on track to close an initial fundraising round of up to $2bn in the first half of calendar 2025.

“What we also liked is that if you look at the operating assets, they’re all very new, so less than three years average age of the kit,” she said.

“It’s well diversified by technology … it’s very well contracted – day one, it’s got an average contract life of 10 years, and 85 per cent of the generation is contracted – which is very appealing to the super fund investors, but importantly it comes with a fantastic development pipeline.

“We are very positive on having exposure to the state of Victoria, given it’s got the largest percentage of coal generation in those east coast NEM states. There’s a lot of runway there for further renewables deployment.

“And at the end of the day, the entry price is fantastic. We’re buying it at circa 30 per cent below replacement cost for the operating assets and getting that development pipeline for free.”

Victoria's big battery near Geelong. Picture: Supplied

HMC’s energy transition fund is chaired by former Prime Minister Julia Gillard and in July secured its first asset, agreeing to pay around $50m for a majority stake in battery developer StorEnergy.

The fund is seeking to build a 15GW portfolio of projects – including wind, solar, battery, biofuels and other emerging technologies – as it looks to support the federal government’s goal of having renewables generate 82 per cent of the country’s power by 2030.

Ms Karl said that while the nation was “headed in the right direction”, two major challenges remained in the way to reaching the ambitious target.

“One is the transmission build-out and the connection complexity, but the policy setters, particularly at the federal level, have implemented a lot of enabling initiatives to address that, and it will take time,” she said.

“And then the other is just the sheer magnitude of the construction exercise that needs to occur – when you start to add up the number of truck movements and the number of shipping containers and the number of people – it’s a big exercise.

“But I think we’re on the journey. It’s a difficult journey, but it’s a necessary one, and probably the right one for the country, because if you look at the physicalities of it, other than Africa, we’ve got more excess renewable energy that hits our land mass every day versus anywhere else in the world.”

To support the security of the grid as Australia moves away from coal and gas towards a renewables future, Ms Karl said the fund was looking at a range of long duration battery technologies that were “starting to become commercially viable” overseas.

“There’s no silver bullet, so I think people moving away from that concept is pretty important,” she said.

“But there’s various types of geothermal, electromechanical and electrochemical long duration energy storage solutions globally, and we’re actively looking at a number of opportunities in each of those spaces.”

HMC, whose funds oversee investments in traditional real estate, private equity, private credit, and more recently energy transition markets, is behind this year’s largest IPO in Australia – a $4bn portfolio of data centres known as DigiCo Infrastructure REIT – which will start trading on the ASX next week.

HMC Capital shares closed up 1.7 per cent at $12.40, against a steady S&P/ASX 200 index.