Hanwha Energy Australia has tapped Azure Capital to find a like-minded investment partner for its shovel-ready solar and battery storage assets in NSW.
Street Talk understands the South Korean player has begun an investor search after nearly five years of work on its Australian assets. It wants to have a partner locked in by year-end, just in time for grid connections for the solar farms, sources said.
The portfolio includes three assets. The Gregadoo solar farm, which has a 65 megawatts capacity (on an alternating current basis), is located 8 kilometres from Wagga Wagga. About 120 kilometres from Gregadoo, Hanwha is ready to build a bigger 120-megawatt solar farm. It has development approval for a co-located 30-megawatt battery energy storage system. Lastly, there’s an option to acquire an interest in a 200-megawatt battery at Boiling Down.
Potential partners have been told Hanwha expects Gregadoo to receive an offer to connect in the September quarter, followed by Jindera in the December quarter. Notice to proceed for both would be squared off by March. In short, it’s done the grunt work and is ready to build the farms with a partner.
A highlight of the sell-side pitch is Hanwha’s electricity retaining arm Nectr, which will sign fixed-price offtakes to buy both solar farms’ entire output for the next 10 years. Nectr already has 38,000 residential and commercial customers and is aiming to provide “energy as a platform service” by 2025. These power purchase agreements are guaranteed by Hanwha’s South Korean parent, making them “investment grade”.
Azure dealmakers also pointed out that the assets are ideally located: no grid risks, close to regional reference nodes, and primed to build sub-stations for grid connections less than a kilometre away from the sites. The flyer said all federal and state government approvals have been ticked off, long-term leases agreements have been signed, and talks with a top-tier contractor to start building are under way.
It flaunted Hanwha’s renewables credentials, which includes a 16-gigawatt global solar pipeline and in-house development expertise. And, of course, tyre kickers were reminded with coal-fired electricity on its way out – think Eraring’s closure slated for 2025 – fixed price contracts could help alleviate NSW’s exposure to volatile energy prices.
Azure is expected to run a traditional two-part process. An information memorandum and financial model would be available before first-round bids. Parties advancing to the second round would get access to detailed due diligence and management presentations.
It’s Street Talk’s second sighting of Hanwha on the local dealmaking scene this year. As previously reported, the company – among the seven largest conglomerates in South Korea – is among suitors circling listed shipbuilder Austal.
Hanwha’s solar portfolio has landed on the dealmaking circuit, on the back of a flurry of renewables transactions in which CWP Renewables, Spark Renewables and Wirsol Energy all changed hands. RBC Capital Markets is running a process for Alinta’s Victorian offshore wind project Spinifex; Macquarie Capital’s busy with LightSource BP’s $1 billion Aussie solar farms, and ICA Partners has been showing a renewables pipeline.