Rest, the $51 billion superannuation fund, has bought the 60 per cent of Collgar Wind Farm it did not already own from UBS for an undisclosed sum.
Collgar, Western Australia’s biggest renewable energy producer, was worth around $750 million when it was built in 2011.
The deal will make the windfarm one of the largest local renewable energy projects directly owned by an Australian super fund.
The project generates, on average, between 40 and 50 per cent of the state’s renewable electricity. This is enough to power up to 170,000 average WA households per year and displace up to 690,000 tonnes of carbon dioxide emissions per year.
The deal was negotiated by Rest’s internal investment manager, Super Investment Management.
George Zielinksi, the investment manager’s CIO said the project is expected to continue to generate sustainable cash flows.
“Collgar Wind Farm is a premium infrastructure asset that has been delivering strong returns for Rest members,” he said. “Renewable energy projects like this will continue to play an important role in Australia’s future.
The CIO also said as an existing owner of the windfarm since construction, Rest was very familiar with the asset.
“Taking full ownership is a great opportunity to drive further value from the asset and strengthen Rest’s infrastructure portfolio.
“We are confident it will help grow members’ retirement savings into the future.”
Zielinksi added that the super fund was on the lookout for more infrastructure assets particularly other renewable energy projects, airports and transmission networks.
“While you observe some deals going through that look expensive you can still find value” Zielinski argued.
Interestingly, he said, Rest is not focussed on emerging markets at the moment.
Infrastructure currently makes up about six per cent of the asset allocation of Rest’s core strategy with property accounting for 10.5 per cent and private equity at just under 1 per cent.
Rest is a member of the Macquarie Infrastructure Partners-led consortium that entered into an agreement to acquire the Long Beach Container Terminal in April. The terminal is located in the Port of Long Beach, California which, together with the neighbouring Port of Los Angeles, is part of the largest container port complex in the United States.
The deal is subject to approval by the US antitrust regulator as well as by the Committee on Foreign Investment in the US (CFIUS) and is expected to completed in the third quarter of 2019.