Aware Super has made a cornerstone investment into North Harbour Clean Energy (NHCE) as it positions the A$155bn (€104bn) superannuation fund to capture an emerging new wave of Australian energy technologies.
The investment, the first for Aware Super in the renewable energy storage space, carries a longer-term ambition to develop a A$1bn energy storage platform.
Aware Super senior portfolio manager, Mark Hector, told IPE Real Assets: “It is an earlier-stage development opportunity that does carry more risk and therefore higher expected rewards.“
He added: “We do have a mandate to design and construct (projects). We have done a few PPPs and other major capital work projects, which do carry higher risks.
“It is part of our investment ethos that in order to generate optimal returns for members we should not just focus on low-risk, low-return investments.”
Given its size, Hector said the fund tended to make larger investments in large individual stand-alone projects.
He said the NHCE platform provided “a clever way for us” to access smaller-to-medium-sized projects by joining forces with a group of niche energy experts who had established the company.
Aware Super will fund all the development costs of projects in pumped hydro storage and flow battery storage, which will be developed with the fund’s oversight and approval.
Hector said he was unable to disclose details of the fund’s equity investment or the stake that it now holds in NHCE.
“What I can say is we have a material equity stage and we are providing initial seed capital or working capital and due diligence-related development costs to get projects to completion.
“In terms of our appetite for equity cheques for the underlying projects, they could be anywhere from many tens of millions to hundreds of millions. Our intention is to create a platform in totality of A$1bn-plus over several years.”
NHCE managing director, Tony Schultz, said the firm’s strategy was to focus on accelerating projects to the date of their commercial operation.
”We know electrifying the Australian economy needs to mean more than simply replacing domestic energy generation with renewables,” Schultz said.
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