- 10% IRR pre-tax, post fees
- Tax effective yield of 8% targeted for years 1 to 5
- 4.1 million tonnes CO2-e emissions avoided
- 15 gigalitres of water use avoided
- 78 deaths avoided
The Solar Asset Fund is an opportunity for wholesale investors to co-invest with IIG in an unlisted portfolio of up to $180m in Australian solar infrastructure assets, with exposure to the electricity spot market.
Australia’s electricity market is undergoing a structural transition away from aging fossil fuel generators towards cleaner energy production.
The IIG Solar Asset Fund owns large- scale solar farms intended to meet the market’s demand for new generation infrastructure.
This is the next stage in IIG’s clean energy journey, following the successful 2016 launch and delivery of the IIG Solar Income Fund.
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- Expected reliable cashflow from real assets, with limited correlation to financial market fluctuations;
- Tax effective returns, benefiting from high depreciation in early years;
- 20 year term with an exit sought in years 5 to 7;
- Solar infrastructure assets with exposure to the National Electricity Market (NEM), and potential for Power Purchase Agreements (PPAs);
- Known portfolio of seed assets with well- mitigated construction risk;
- Manager with a strong record delivering and operating similar assets;
- Highly respected, majority independent board comprising experienced energy and infrastructure industry leaders, chaired by Chloe Munro AO.
- Provide investors with access to a diversified portfolio of Australian solar infrastructure assets which generate commercial returns from electricity and related markets;
- Deliver attractive total returns and provide investors with reliable, tax-effective quarterly distributions;
- Generate measurable environmental and social impact including reducing emissions, water usage and negative health impacts from fossil fuels.
- Invest in solar infrastructure assets that are fully contracted for construction and initial operations;
- Complete the construction of seed assets that are being delivered at a cost of approximately $120 million;
- Acquire further assets that meet the investment mandate and further diversify the portfolio;
- Operate solar infrastructure assets that provide exposure to Australia’s NEM, and have potential to enter into PPAs.
Electricity Market Strategy
The Solar Asset Fund solar farms receive income based on current pricing from the National Electricity Market. They also derive income from the sale of Large-scale Renewable Energy Certificates (LGCs).
The Fund may elect to enter into short or long term Power Purchase Agreements where such arrangements are considered to be financially beneficial on a risk adjusted basis.
- Target Fund Size $180 million of solar infrastructure assets
- Equity Investment Offer Target $110 million
- Opening Date May 2018
- Minimum Investment $100,000
- Unit Price & Structure $1.00 per unit, partly paid
- Capital Calls Partly paid on investment confirmation. Refer to information memorandum for further detail.
- Target Distributions Quarterly, averaging 8% over first 3 years.
- Target IRR 10% over Trust term
- Gearing Debt will be senior secured at the asset level and to a maximum 50% LVR.
- Suitability All investors must be wholesale clients as that term is defined in the Corporations Act 2001(Cth).
Abate 4.1 million tonnes CO2-e
Benefits to climate from producing renewable power and reducing carbon emissions.
Produce 4.2 million MWh of low emissions power generation over the life of the seed assets.
Abate 138,000 tonnes of CO2-e on average per year and 4.1 million tonnes of CO2-e over the life of the seed assets.
Avoid 78 deaths
Benefits to health and wellbeing by reducing from pollution-related diseases.
Reduce the release of environmental toxins from primarily fossil fuel electricity generation in the current NEM/grid, resulting in 78 deaths avoided and 42,000 illnesses avoided over the life of the seed assets.
Save 15,050 megalitres of water
Benefits to water from reducing consumption.
Reduced water use relative to primarily fossil fuel electricity generation on the current NEM/grid, with savings estimated at 15,050 megalitres over the life of the seed assets.
Create 470 jobs, via seed assets
Benefits to shared prosperity by investing in new construction.
Create more than double the number of jobs than oil, natural gas and coal facilities (per $1 million in output). The seed assets, over their lifetime, are expected to create 470 direct and indirect jobs.
Increase economic activity, mostly in regional areas, which can boost local economies.