GLOBAL RENEWABLES EASTERN CREEK

OTHER

ASSET DESCRIPTION

  • Operating alternative waste treatment plant, 40km west of Sydney
  • Receives 220kt of household solid waste per annum, and sorts into recyclables, organics and residual waste for landfill
  • Contract with SITA (backed by NSW Government guarantee) until 2032
  • 50% equity interest
  • Palisade has Board representation

INVESTMENT FUNDAMENTALS

  • Strong cash yield backed by NSW Government guaranteed revenue stream
  • Potential growth opportunity to expand plant capacity and implement additional diversion processes
  • Conservative gearing levels
  • Preferential yield to Palisade through a Shareholder Loan instrument

KEY RISKS AND MITIGATION

  • Revenue risk is managed through fixed price, fixed volume contract with SITA (ultimately backed by NSW Government guarantee)
  • Seasonal conditions mitigated, as well as exposure to variations in waste input quality, through monthly waste audits and subsequent contractual adjustments to price
  • Operating costs management necessary to maintain EBITDA margins
  • Asset condition managed through modular nature of the plant and proactive/reactive maintenance procedures
  • Refinancing risk mitigated through conservative capital structure