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.
Australian wholesale electricity prices have risen relative to historical prices due to structural changes in the market. Australia’s gas supply is exposed to international prices and coal-fired generators are being retired. Both factors will persist and place upward pressure on wholesale electricity prices.1
In IIG’s assessment, the PPA market is currently concentrated and illiquid, with much of the value transferring to purchasers. This means a merchant power strategy (selling electricity on the open market) is currently more financially attractive than entering into PPAs.
The Fund’s assets are suitable for entering into PPAs, if the PPA market improves and the board asseses that doing so is in the best interest of investors.
1 Based on modelled forecasts by EY, which incorporate assumptions provided by IIG. Refer to information memorandum for further detail.
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.