Palisade's Renewable Energy Fund

Palisade’s Renewable Energy Fund comprises two unlisted unit trusts – Palisade’s Renewable Energy Fund 1 (PREF1) and Palisade’s Renewable Energy Fund 2 (PREF2).

Pinnacle Fund Services Limited is the trustee of PREF1 and Pinnacle RE Services Limited is the trustee of PREF2.  Palisade is the investment manager for each of PREF1 and PREF2 under an investment management agreement with each trustee.

Investment in Australian renewable energy assets

  • Focused Mandate – Australian-based renewable energy assets (with ability to take some New Zealand exposure) – with a key focus on wind and solar projects
  • Large number of renewable assets currently available in Australia, with a significant pipeline of developments that will require long term financing over the coming years to meet government Renewable Energy Target (RET) by 2020

Existing portfolio of operating and development assets

  • Current portfolio of operating and development assets, including two operating wind farms and a solar farm development
  • Operating assets provide immediate yield to investors with 10 year average yields >7%

Significant pipeline of opportunities

  • Fund will be focused on construction and brownfield projects, but will have the ability to invest in and receive higher returns from late-stage greenfield projects which are pre-financial close
  • Top quartile of Australian greenfield sites identified and targeted over the past 12 months via extensive in-house mapping and ranking program

Favourable competitive landscape

  • Whilst we have observed an increase in capital pursuing renewables in Australia in recent times (particularly from offshore players) the opportunity for PREF remains strong, driven by the following factors:
    • Competition for operational projects and projects which are already in construction is significant, however PREF remains one of the few long-term investors capable of entering the market at the pre-construction phase. Our experience on Ross River Solar Farm and Granville Harbour Wind Farm supports this approach, where PREF has been able to generate above-market returns through its earlier-stage involvement in these projects
    • The increase in competition referred to above has tended to be for shorter-term commitments during the development and construction phases rather than from longer-term capital such as PREF
    • Political uncertainty – While the Renewable Energy Target out to 2030 remains unchanged, the failure of the current Coalition Government to successfully implement the National Energy Guarantee means that there remains uncertainty around future policy developments. While PREF is still seeking long-term contracted cashflows in projects it pursues, this lack of policy certainty may limit competition from longer term investors in the sector