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BlackRock Invests in Growing Australian Solar Market

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08/11/2017 | 06:56 am

By Robb M. Stewart

MELBOURNE, Australia--The steady growth of renewable-power generation in Australia has scored backing from BlackRock Inc. (>> BlackRock), which has bought a majority stake in two projects, in one of the country's largest solar financing deals to date.

On Friday, the asset manager said it acquired 90% of the 150-megawatt Daydream and 50-megawatt Hayman solar farms in Queensland state from developer Edify Energy, which will hold the remaining 10% equity interest.

The deal comes just over a month after Tesla Inc. (>> Tesla) Chief Executive Elon Musk agreed to build the world's largest lithium-ion battery system in Australia, collecting power generated by a wind farm in South Australia. South Australia state was hit by a string of blackouts over the past year, raising concerns as some of the country's older coal-fired energy plants are shuttered.

BlackRock said the acquisition adds further solar resources and country diversification to its existing renewable-energy portfolio. Construction on the Australian projects is set to begin and they are scheduled to be fully operational in 2018.

The assets were bought through a private fund managed by BlackRock Real Assets, with long-term debt financing provided by the government's Australia's Clean Energy Finance Corp., Commonwealth Bank of Australia Ltd. and international investment firm Natixis. BlackRock Real Assets has about $30 billion in invested and committed real-estate and infrastructure assets and capital.

Jim Barry, global head of BlackRock Real Assets, said the company's renewable power investments currently amount to more than $4.8 billion of equity assets under management. "We continue to invest in attractive markets in order to provide a flow of addressable investment opportunities for our clients," he said.

Renewable energy still accounts for a relatively small slice of power production in Australia, although the country's major utilities are investing in expanding output.

In May, Origin Energy Ltd. (>> Origin Energy Ltd) sold its Darling Downs solar farm project in Queensland to energy-infrastructure operator APA Group in a deal that had it agree to buy all the power generated by the farm until 2030. In about a year, Origin added more than 650 megawatts of solar to its portfolio as it tracks toward a target of up to 1,500 megawatts of large-scale renewable generation by 2020.

Sustainable Energy Research Analytics, a consultancy, estimated there is about 311 megawatts of solar power now in operation in Australia, 1 gigawatt under construction and a further 6 gigawatts in advanced stages of design.

Write to Robb M. Stewart at [email protected]

Stocks mentioned in the article : BlackRock, Tesla, Origin Energy Ltd
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