Buyers shoot the breeze over wind farm Snowtown

https://www.theaustralian.com.au/business/dataroom/buyers-shoot-the-breeze-over-wind-farm-snowtown/news-story/af1606064f3c4bca5b743a24afd7ccb4

Buyers shoot the breeze over wind farm Snowtown The starter’s gun has been fired for the sales process of the Tilt Renewables project Snowtown 2, which is expected to be worth around $800 million. Advisory firm Lazard is working on the sales … http://www.theaustralian.com.au

Buyers shoot the breeze over wind farm Snowtown

·         Bridget Carter

Mergers & Acquisitions Editor

@BridgetCarterb

The starter’s gun has been fired for the sales process of the Tilt Renewables project Snowtown 2, which is expected to be worth around $800 million.

Advisory firm Lazard is working on the sales process for the $1.12bn Tilt Renewables, which is listed in Australia and New Zealand.

Tilt poured $400m into the South Australian project when it was built in 2014.

 

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The second-largest wind farm in Australia, it has a maximum capacity of 270 megawatts, with 90 turbines producing enough electricity to power 200,000 South Australian homes.

An offtake agreement is in place with Origin Energy until 2035.

Flyers are understood to be in the market and prospective buyers have been approached in the past week.

Tilt Renewables is a Melbourne-based company that has assets in Australia and New Zealand and is listed on both the Australian Securities Exchange and the NZX.

New Zealand infrastructure investor Infratil owns 65 per cent of Tilt Renewables, which posted a $NZ12.2m ($11.6m) net profit for the year to March, down from $NZ16.9m during the previous corresponding period.

Recent sales, including the sale of Victoria’s Bald Hills wind farm in 2017 and the $532m sale of a 50 per cent interest in the Macarthur Wind Farm by AGL Energy to Morrison in 2015, have been struck at a rate of $3m per megawatt, which would put a value of more than $800m on Snowtown 2.

The sale is launching as Rothschild continues to seek a buyer for Malakoff’s half-share in Macarthur, which existing half-owner Morrison, which manages Infratil, could also acquire.

Final bids are due in three weeks.

Macarthur has installed capacity of 420MW.

AMP Capital and Morrison are thought to be interested, while Palisade and ICG were thought to be in the mix early on.

The low-risk, low-return project would likely appeal to superannuation funds.

The sales are happening after renewable deals have buoyed the market for several years, although they ran out of steam towards the end of last year.

In the first half of 2018, 27 renewables projects, including greenfield construction, sales and refinancings worth $US4.9bn ($7bn) made financial close, according to Acrusis.

In the first half of 2019, there were just 11 deals worth about $US1.25bn.

As well as the approaching end of the 2020 national Renewable Energy Target, which has been the main driver of activity, the electricity network operator AEMO has been stifling activity by imposing a mass of new requirements to shore up a shaky grid.

Low power purchase agreement prices and rising energy, procurement and construction costs have added to the headwinds and made it harder for banks to finance projects.

Overall, data from Acrusis showed that the value of infrastructure deals in Australia over the past six months was $US23bn.

This was $US2.7bn higher than the previous corresponding period.

However, most of the deals involved the refinancing of existing projects, with fewer new-build infrastructure projects or large mergers and acquisitions being financed.

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