The deal involves the first major investment by an Australian superannuation fund in this sector
Hamilton Locke has advised Birdwood Energy on a $2bn distributed energy deal that involves what the firm said is “the first significant investment by an Australian superannuation fund into the distributed energy sector.”
The transaction covers the formation of the Birdwood Distributed Energy Platform, into which Aware Super has made an initial commitment of $300m. The investment is set to be deployed over the coming one to two years.
The platform facilitates Aware Super’s investment in smaller projects “can be deployed faster and have lower development risk and quicker grid connections, all augmented by battery storage,” Hamilton Locke said. According to a Birdwood Energy media release, two operating solar farms have been purchased by the platform; the farms will be improved with BESS. In addition, the platform has made an investment in a commercial renewable asset finance business; it is also preparing to build another 10 grid solar and battery projects.
“Distributed energy is difficult for institutional investors to access due to the multitude of small developers and companies. While this sector offers the cheapest, most secure and cleanest energy system, it does require investment at scale in order to achieve capital and operating efficiencies and hit our net zero targets – with distributed energy, we are able to fulfil about 60% of Australia’s future energy requirement,” Birdwood Energy managing partner Scott McGregor explained.
He added that the acquisition strategy for the Birdwood Distributed Energy Platform will “focus on late-stage developments, ready-to-build projects and equity investments in businesses to scale and accelerate distributed energy.”
“Platforms and aggregated investment vehicles such as the Birdwood Distributed Energy Platform within which smaller renewable generation and energy storage projects are originated, developed, constructed and operated on an aggregated basis provide superfunds and similar investors with a scalable, diversified ESG focused investment expected to generate strong risk-adjusted returns when compared to large-scale renewable generation investments,” said Matt Baumgurtel, new energy lead at Hamilton Locke.
The Hamilton Locke team included Baumgurtel, partners Jo Ruitenberg and Erik Setio, special counsel Adriaan van der Merwe, senior associate Hannah Jones, and lawyers Nick Huett, Annabelle Parmegiani, and Zane O’Neill.
