A new fund for smaller-scale renewable energy projects in Australia has been launched by the Foresight Group, a UK-based infrastructure and private equity investment manager.
The Foresight Renewable Energy Income Fund will target $150 million in size and will make loans of $5 million to $30 million, mainly to small-scale solar and wind and associated infrastructure projects.
Each loan will be certified by the Climate Bonds Initiative (CBI) and verified by the Carbon Trust.
The fund will target a 4.0-4.5 per cent yield margin over the RBA cash rate.
The fund will open doors for Australian wholesale investors interested in CBI certified green debt, an asset class that’s usually only accessible to institutional investors.
Head of Australia at Foresight, Kim Nguyen, said that the big banks tend to overlook smaller scale wind and solar projects as “they are generalists and lack the dedicated resources to identify and assess small-scale projects.”
Ms Nguyen says there’s an opportunity for infrastructure investment specialists to fill this gap.
The company claims to be the largest international investor into solar in Australia with over 250MW of solar projects though funds managed on behalf of institutions.
One of its key investments in Australia is the 110MW Bannerton project in Victoria, a 192 hectare solar farm that provides clean energy to the Melbourne Tram network.
This is the company’s first wholesale fund in Australia.
“There is no question that the surge in interest for green bonds and renewable energy infrastructure will only continue to intensify,” Foresight head of infrastructure Nigel Aitchison said.
“Investors have shifted their focus to true-to-label investment solutions that directly contribute to the global decarbonisation agenda.”