Palisade launches new renewable energy fund

Palisade has launched the Palisade’s Renewable Energy Fund (PREF) and it is open to commitments.

The company estimates that over A$10 billion of investment will be required over the next five years in order to achieve the Government’s Renewable Energy Target (RET) to source 23% of all Australian energy usage from renewable sources by 2020 (currently estimated to be around 13-14%). Accordingly, there is a significant opportunity to generate attractive risk-adjusted returns across a large, visible and diverse pipeline of renewable assets.

PREF has a mandate to invest in Australian-based renewable energy assets, with a key focus on wind and solar assets. Key features of PREF include:

• Target size of AUD500 million which will fund the acquisition and development of over 500MW of renewable projects (equivalent to c.A$1 billion of EV) over the investment period to 2020
• Seeking diversification in the renewable sector across energy sources, PPA counterparties, location and maturity of projects
• Targeting double-digit equity IRRs backed by long-term PPAs with the ability to invest in and receive higher returns from late-stage greenfield projects (pre-financial close)
• Seeded with two brownfield windfarm assets (total equity value of $72 million) providing forecast 5 year cash yields in excess of 9% and initial equity IRR in excess of 10.75%
• Partnership with the Clean Energy Finance Corporation (CEFC) who has committed up to AUD100 million of cornerstone equity through a direct investment mandate.