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Patrizia, Mitsui & Co close A$70 mil Australian renewables deal

Jovi Ho
·3-min read

The deal marks the debut investment for the APAC Sustainable Infrastructure Fund (A-SIF), a joint venture launched in January.

International trading and investment company Mitsui & Co and pan-European real estate investment manager Patrizia have committed to invest up to A$70 million ($60.93 million) in a major solar and battery development programme in Australia through the APAC Sustainable Infrastructure Fund (A-SIF), announced the two parties on Oct 9.

The deal marks the debut investment for A-SIF, a joint venture launched in January.

The investment comprises an equity interest in Australia-headquartered Yates Electrical Services (YES) Group, together with a commitment to fund the development of a portfolio of predominantly small-scale solar photovoltaic (PV) generation and battery energy storage solutions throughout regional Australia.

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According to Patrizia, the portfolio will have the potential to deliver over 150 megawatts (MW) of capacity once fully operational. It is expected that a 150MW renewables portfolio will offset over 335,000 tonnes of CO2 each year compared to coal-fired energy, and provide green power to approximately 65,000 households.

Patrizia says the strategic decision to focus on a portfolio of small-scale generation assets will ensure diversification across the distribution network, shorter and predictable construction times, less transmission losses, less regulatory risk and the advantage of being able to spread assets geographically to target sites with higher solar irradiance.

“The development locations in rural Australia will help unlock value in under-utilised or redundant land for the community and generate local and skilled employment opportunities throughout a 30-year lifecycle,” adds Patrizia.

Founded over 15 years ago, YES Group is a licenced, vertically integrated energy solutions provider. The company has successfully installed over 1,700 rooftop solar systems (sub-1MW), over 120 ground mount solar farms (sub-5MW) and works on major infrastructure projects across Australia’s national electricity network.

Patrizia and YES Group have worked together since September 2020, delivering over 60MW of approved projects with a further pipeline of over 70MW identified, in addition to the target of over 150MW through A-SIF.

Saji Anantakrishnan, head of infrastructure for Australia and Asia at Patrizia, says decarbonisation and climate change are two core megatrends that underpin the firm’s global investment philosophy. “This first deal for A-SIF demonstrates our strong conviction to energy transition and the attractive long-term returns renewables can generate for our institutional investors. Our vision in APAC for both Patrizias real assets platform and our flagship mid-market fund is to collaborate with like-minded investors and regional partners to build a portfolio of infrastructure assets that deliver positive sustainable outcomes.”

A-SIF is the second fund from the PATRIZIA-Mitsui collaboration, following the launch of the Emerging Market Infrastructure Fund (EMIF) in 2008, which also had a focus on APAC.

A-SIR launched on Jan 18 with US$110 million equity to invest at first close. The Development Bank of Japan is an anchor investor, with other investors based in Japan and Europe.

With a target size of between US$500 million and US$1 billion, the fund will invest in the four core sectors of energy (50%), digital (20%), social (20%) and mobility (10%) across “key developed markets” including Australia, Japan, Singapore, South Korea, New Zealand and Taiwan, as well as in “select developing Asian markets”, said the companies in January.

With a 39-year track-record, Patriziamanages around EUR58 billion ($83.72 billion) AUM globally for its clients, of which EUR10 billion is for institutional investors who are located in Asia-Pacific.

Mitsui is a global trading and investment company with a presence in more than 60 countries and a diverse business portfolio covering a wide range of industries.

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