Igneo approaches banks for renewables financing

Data Insight Inside Infra 29 November

Igneo approaches banks for renewables financing

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Igneo Infrastructure Partners has approached banks to refinance its Australian solar and wind assets, according to two sources familiar. 

Igneostarted to consider the refinancing plan in May, but it has only formally started the process recently. 

Igneo's portfolio financing is one of a number in the Australian market. Palisade Investment Partners is working on an AUD 1.5bn (USD 1bn) refinancing and reorganisation of its renewables business; Ratch Australia also bundled its renewables assets into a large debt facility; PowARadded the Silverton wind farm into its Tilt Renewables facility and still plans to add Coopers Gap wind farm; and Partners Group has arranged a stapled financing for its CWP Australia portfolio, which will have the same effect. 

Bankers said that the main reason that Australian renewables owners are embracing portfolio deals is that they finally have portfolios large enough for it to make sense. Bankers like the scale and diversified risk of these deals, which mean that they will lend for less. 

Igneo, a rebadged part of First Sentier, in April bought Elliott Green Power Australia's (EGP) 302 MW solar assets through its Atmos Renewables vehicle, funded by the USD 4.1bn Global Diversified Infrastructure Fund. At the time, Igneo said that Atmos had grown to encompass seven operating wind farms and five operating solar farms in an 865 MW portfolio after a string of acquisitions, making it Australia's fourth largest renewables portfolio. 

In March, Palisade Investment Partners and Igneo reached financial close on their purchase of Commonwealth Superannuation Corp's (CSC) 50% stake in the Macarthur wind farm and, in December, First Sentier won 90% of BlackRock's Gretel solar portfolio.  

Natixis and Intesa Sanpaolo financed the debt linked to the three Elliott operating projects in 2019. The two lenders - with the addition of NORD/LB - subsequently refinanced AUD 272m (USD 182m) of debt in June last year. The vendor was talking to banks last year about a possible stapled financing linked to the sale, but that did not happen. 

In 2019, BlackRock and Edify refinanced the assets in the Gretel solar portfolio as they neared completion. The sponsors replaced a 17-year facility with a AUD 287m, five-year mini-perm financing provided by Commonwealth Bank of Australia and the Clean Energy Finance Corp., according to data compiled by Infralogic.  

In March, mandated lead arranger, underwriter and bookrunner MUFG Bank led the debt financing to fund the acquisition of First Sentier's Macarthur stake while Mizuho Bank, Industrial and Commercial Bank of China, DBS Bank and OCBC lent into the five-year, AUD 600m facility. 

That stake is less likely to be refinanced because it only recently closed and because First Sentier bought the stake in partnership with Palisade, which would complicate any refinancing. 

In October 2020, First Sentier acquired John Laing's Australian 209 MW operating wind portfolio. These are: The 58 MW Cherry Tree Wind Farm, which John Laing owns outright, a 72.3% stake in the 31 MW Kiata Wind Farm, as well as 20%-30% stakes in the three stages of the 313 MW Hornsdale Wind Farm and 49.8% of the 112 MW Granville Harbour Wind Farm. 

Last year, First Sentier arranged a three-year refinancing of Cherry Tree, the only wholly owned asset in that original portfolio. 

An Igneo spokesperson declined comment.


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