Ambitious private investment bank Investec expects to develop wind farms worth $500 million or more over the next two to five years after forming a joint venture with the CSIRO’s partly-owned company Windlab Systems to help identify suitable wind farm sites.
The deal with Windlab, which has developed technology to accurately locate sites for greenfield wind farm projects, marks the latest step in Investec’s increased presence in the clean-energy sector.
Investec was an instrumental backer of the listing of Viridis Clean Energy Group last month, which raised $126 million from investors to fund its portfolio of clean-energy projects. Viridis, whose responsible entity is a company partly owned by Investec, closed at $1 on Friday, in line with its float price after listing on the Australian Stock Exchange on September 14. Viridis’s portfolio includes established clean-energy assets such as completed wind farms, generating a high yield for investors, whereas Investec plans to own assets through the riskier development stage.
But the venture with Windlab is part of a “life-cycle approach” to Investec’s involvement in the sector,
according to the company’s clean energy and power specialist Mark Schneider. “What we are looking at is developing a suite of investment offerings where we provide quite different riskreward
outcomes,” Mr Schneider said.
Investec would make some investments on its own balance sheet during the early and intermediate stages of wind farm developments, and in some cases would bring in outside investors (via its high net worth client network) to co-invest in these projects.
“In the first stage the investment might be made by Investec Bank as principal. When we get to a size that makes sense we would move towards a syndicate with some of our private client investors. Maybe one day we would create enough scale for a fund.” Mr Schneider said the joint venture with Windlab could give Investec an edge in identifying sites for wind farm developments.
Windlab, a private company partly owned by but separate from the CSIRO, uses climate models to forecast average wind speeds in specific locations. This will give Investec better information when negotiating with land-holders about using their land to set up wind farms and ensure it only establishes farms on quality sites.
It should also help Investec compete with other developers, which include established power companies, financial institutions such as Babcock & Brown, international wind turbine makers such as Spain’s Gamesa, and individual developers.
Mr Schneider said while there were a lot of development applications being lodged for new wind farms, the local market was in decline because of the government’s failure to extend the mandatory renewable energy target.
However the situation in New Zealand was different, and Investec was likely to initially make much of its
investment in new wind farms there.
Investec expects to be involved in the development of about six sites in two years in New Zealand, with a similar number planned for Australia and South Africa.