Aware Super, HESTA invest in Palisade's new renewable energy platform

Palisade Investment Partners established a new renewable energy platform, Intera Renewables, with superannuation funds Health Employees Superannuation Trust Australia, Melbourne, and Aware Super, Sydney, and the Clean Energy Finance Corporation as investors.

The creation of Intera brings together five of Palisade's renewable energy assets, Hallett 1 Wind Farm and Snowtown 2 Wind Farm in South Australia, Granville Harbour Wind Farm in Tasmania, Macarthur Wind Farm in Victoria and Ross River Solar Farm in Queensland, into a single entity. The assets will share common ownership, governance, management and financing structure, according to a statement on Tuesday.

By establishing Intera, Palisade created a A$1.3 billion ($856 million) single portfolio financing facility secured against Intera's assets. This provides Palisade with diverse cash flows within one entity, which in turn allows the firm to better utilize debt funding for strategic purposes, the statement said.

The new platform will focus on developing and constructing renewable energy projects while providing investors with stable income returns underwritten by its existing portfolio of operating assets, it said.

"Renewables generation are just part of the broader energy transition and decarbonization story which we believe will generate infrastructure investment opportunities," Mark Hector, senior portfolio manager for infrastructure at the A$155 billion Aware Super, said in emailed comments.

"This platform will help us to diversify our renewables exposure to include stakes in other predominantly grid-scale wind generators," he added.

Diversification is particularly important for renewables – possibly more than any other infrastructure asset class "because of the variability in generation performance across geographies, sites and technology," he said. "Diversification not only helps us derisk our portfolio, but also establishes a platform that can be used for some further growth."

Aware Super is also looking to diversify further from traditional renewables generation "into storage and firming capacity and other ancillary and emerging energy transition opportunities such as our Generate platform in the U.S.," he said, referring to Aware's investment into Generate Capital, a sustainable infrastructure company that in 2021 raised $2 billion from institutional investors including Aware Super, AustralianSuper, AP2 in Sweden, Railways Pensions of the U.K. and The Wellcome Trust.

The super fund has invested A$2 billion into renewable energy and climate solution opportunities across infrastructure, private equity and fixed income. A spokeswoman did not respond to how much of the A$2 billion its Intera investment comprises.

Mr. Hector also said that because of the complex and dynamic nature of the sector, renewables and the energy transition attracts risk that "runs the gamut of policy, merchant forecasting, grid connection, technology advancement, asset useful life risks."

However, this can be circumvented by having the investment team understand the risks and pricing the opportunity well.

"Our team's patience and selective approach to reviewing opportunities means we will continue to identify good financial risk and reward opportunities for our members, which is our key objective," Mr. Hector said.