• The Foresight Renewable Energy Income Fund, targeting $150 million in size, will make loans of $5m-$30m predominantly to small-scale solar and wind projects located in Australia
• Each loan will be individually structured under a tailored Sustainability Framework certified by the Climate Bonds Initiative and verified by the Carbon Trust
• The Fund targets a 4.0%-4.5% yield margin over the RBA cash rate
• The Fund’s target first close is November 2019
Global infrastructure and private equity investment manager Foresight Group LLP (“Foresight”) has launched a unique investment fund, Foresight Renewable Energy Income Fund (“FREIF” or “Fund”), to provide Australian wholesale investors access to Climate Bonds Initiative (“CBI”) certified green debt.
The Fund is designed to generate superior risk-adjusted returns by investing in secured Australia-based smaller scale renewable energy projects. Infrastructure debt offers diversification benefits through lower correlations with the broader equity, property, and bond markets. The Fund has the objective of providing investors with an attractive, reliable and predictable income and will target a yield margin of 4.0% to 4.5% over the RBA Cash Rate.
The Fund will also be the first to pool capital into a series of CBI-Certified loans and will give Australian wholesale investors unique access to an asset class that has typically been available exclusively to institutional investors.
Kim Nguyen, Head of Australia at Foresight, said: “The Foresight Renewable Energy Income Fund is innovative in a global sense. We hope it helps put Australia on the map as an innovator in the fast-growing green debt capital markets.
“Historically, the big banks have overlooked smaller-ticket wind and solar projects, as they are generalists and lack the dedicated resources to identify and assess small-scale projects. This presents a significant opportunity for us as infrastructure investment specialists. With a proven 35-year investment track record, Foresight has the experience and the sector knowledge to best capture these opportunities in the interest of Australian investors.”
This is Foresight’s first wholesale fund in Australia. Managing funds on behalf of institutions, Foresight quickly became the largest international investor into solar in Australia with over 250MW of solar projects. One of the projects, Bannerton Solar Park, provides clean energy that is used to power the Melbourne tram network.
Nigel Aitchison, Head of Infrastructure at Foresight, said: “There is no question that the surge in interest for green bonds and renewable energy infrastructure will only continue to intensify. Investors have shifted their focus to true-to-label investment solutions that directly contribute to the global decarbonisation agenda.
“The Foresight Renewable Energy Income Fund fits this bill. The Fund takes a unique “bottom-up” approach to CBI-certification. This means that each loan will be individually tailored to meet a Sustainability Framework which has been certified by Climate Bonds Initiative (“CBI”) and verified by the Carbon Trust.
“We believe this sets the new gold standard for green debt funding in Australia.”
The Fund will focus purely on lending to renewable energy generation and associated infrastructure projects. An indicative portfolio would save an estimated 5.7 million tonnes of CO2 emissions over the life of the underlying assets compared to the equivalent coal generation – this equates to a year’s worth of power for 1.6 million Australian homes.
If you’d like to arrange an interview with Kim Nguyen, please get in touch with:
T: +61 (02) 9018 8611
T: +61 (02) 9018 8633
About Foresight Group LLP
Foresight is a leading infrastructure and private equity investment manager which has been investing on behalf of institutions and private investors for over 35 years.
With strengths in solar and bioenergy, Foresight manages over A$5.6 billion invested in more than 190 renewable generation assets; including more than 100 operating solar plantsin the UK, Southern Europe, and Australia.
Since 2017, Foresight has established itself as one of the largest solar investors in Australia; managing A$400 million across four Queensland solar farms and the 110MW Bannerton project in Victoria, a 192 hectare solar farm that can generate enough clean electricity to power 30,000 homes and that provides clean energy to the Melbourne Tram network.
About Foresight Renewable Energy Income Fund
The Fund is currently open to wholesale and sophisticated investors. It will provide Australian wholesale investors with an attractive risk-adjusted return via the appealing characteristics of the infrastructure debt asset class. For more information, please visit: www.foresightgroupau.com/foresight-renewable-energy-income-fund
About the Climate Bonds Initiative
The Climate Bonds Initiative administers an international standards and certification scheme for green and sustainable debt instruments. The Climate Bonds Standard is a science-based process designed to guide investors towards projects that contribute to addressing climate change. https://www.climatebonds.net/