Successful Refinancing of Energy Infrastructure Trust’s Mumbida Wind Farm

Infrastructure Capital Group (ICG) is pleased to announce that it has secured a landmark funding package for the refinancing of the $124 million loan to Mumbida Wind Farm (MWF), Energy Infrastructure Trust’s (EIT) 22 turbine, 55 MW wind farm which has been operational since 2013.

Commonwealth Bank of Australia and BNP Paribas provided MWF with a syndicated bank debt facility on competitive terms and with attractive pricing.  ICG has locked in this historically low interest rate for the full 12 year tenor of the debt facility, which is fully 100% hedged for that term.

The refinancing continues ICG’s track record of implementing long-term financings on the assets it manages and reducing financing risks for investors.

Craig Whalen, Executive Director noted that “The transaction demonstrates competitive long-term financing is available in the Australian bank debt market for projects which are well structured.  There continues to be strong demand for renewable projects, especially those backed by a long-term power purchase agreement from a creditworthy counterparty.”

Andrew Pickering, ICG Chairman and EIT Portfolio Manager said “ICG is particularly pleased with this result.  MWF’s debt profile now extends beyond the remaining tenor of the contracted power purchase agreement with Water Corporation WA.  This funding package significantly mitigates not only the refinancing risk for MWF but also the impact of any rises in future interest rates.”

ICG acted as financial advisor for the transaction and was responsible all aspects of the refinancing.

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DIT invests in the Springvale Water Treatment Plant

Infrastructure Capital Group (ICG) is pleased to advise the Diversified Infrastructure Fund (DIT) has, in partnership with Veolia, invested in the Springvale Water Treatment Plant (Springvale WTP).

The Springvale WTP is being built under a 15 year Build Own Operate and Transfer contract to enhance the environmental outcome, and allow for the continued operation of the Mount Piper Power Station (MPPS).  It has been commissioned by EnergyAustralia and the Springvale Joint Venture, who are the counterparties to the contract.  The MPPS is a relatively new power station and provides approximately 15 per cent of NSW’s power.

The investment in Springvale WTP is DIT’s first investment in Australian water infrastructure, and we are pleased to further enhance the Fund’s sector and investment diversification. The investment was sourced through ICG’s relationship with Veolia.

ICG is particularly excited to be partnering with Veolia on this investment.  Veolia is a global wastewater treatment management company and is a highly regarded builder and operator in the water sector.  The partnership provides potential to open up further proprietary transactions.

The contract terms provide DIT investors with stable cashflows over the life of the project, and an attractive forecast Equity IRR.

Construction of the Springvale WTP is expected to be completed in 2019.

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EIT acquires Bald Hills Wind Farm

Infrastructure Capital Group (ICG) is pleased to announce that it has completed the acquisition of Bald Hills Wind Farm – a 106.6MW, 52 turbine wind farm located approximately 140 south east of Melbourne.

Bald Hills Wind Farm commenced operations in September 2015 and is backed by long-term contracts, including a 15-year Offtake Agreement with Alinta Energy until 2030. Under the agreement, Alinta buys the net energy produced at the site at an agreed amount and rate.

The wind farm was acquired from the developer of the project, Mitsui & Co (Australia) Ltd. It is EIT’s first wind farm in Victoria and provides further diversification to the portfolio with renewable energy assets now located across three different states (Victoria, Western Australia and South Australia) backed by three different offtake providers.

Andrew Pickering, ICG Chairman and EIT Portfolio Manager commented “We are very pleased to acquire Bald Hills Wind Farm on behalf of EIT. With its 15-year offtake agreement, it complements EIT’s other winds farms which are also supported by long-term contracts”. Craig Whalen, Executive Director at ICG also noted that “Operationally, there will be no change at the wind farm with all existing contracts remaining unaffected by the acquisition.”

Bald Hills joins other major wind farms owned by ICG, including Mumbida Wind Farm in Western Australia and Wattle Point and Hallett Wind Farms in South Australia, with long-term agreements with WA Water Corporation and AGL respectively. The acquisition cements ICG’s place as one of Australia’s largest owners of renewable generation, with a total installed capacity of 455MW across five wind farms under management, enough to power approximately 250,000 average Australian households annually.

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EIT completes 100% acquisition of Mumbida Wind Farm

Infrastructure Capital Group (ICG) is pleased to announce that it has acquired an additional 50% interest in Mumbida Wind Farm – a 55MW, 22 turbine wind farm located 40km southeast of Geraldton, Western Australia. ICG exercised pre-emptive rights to acquire this 50% from its partner Synergy, which takes Energy Infrastructure Trust’s total ownership to 100%.

Mumbida Wind Farm has been operating since May 2013 providing renewable energy to WA’s Water Corporation to offset the energy requirements of the Southern Seawater desalination plant near Bunbury. GE will continue to operate and maintain the wind farm under existing arrangements.

The investment reinforces EIT’s reputation as one of Australia’s pre-eminent renewable energy investors with renewable generation capacity of almost 350 MWs. Mumbida’s installed generating capacity is capable of producing enough energy to supply the equivalent of about 40,000 average households. Expansion of the wind farm is also possible with development and environmental approvals already obtained.

ICG’s Chair and EIT Portfolio Manager, Andrew Pickering commented “As one of Western Australia’s largest independent generators, we are delighted to have secured 100% of Mumbida Wind Farm. The government backed Offtake Agreement is aligned with EIT’s goal of providing investors with stable and long term investment returns. I would like to thank Synergy for their stewardship of this project and we hope to strengthen our partnership with them through our ongoing involvement in Western Australia.”

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ICG signs Northern Territory Infrastructure Development Fund mandate

Infrastructure Capital Group is pleased to announce that it has commenced management of the Northern Territory Infrastructure Development Fund in partnership with the Fund’s Board and the Northern Territory Government.

The mandate has been seeded with a $200 million investment from the NT Government and seeks to attract additional capital from domestic and international institutional investors. ICG was selected by the NT Government in April this year as manager of the fund’s investments after a competitive tender process.

ICG will now assess potential development projects for the fund, with plans underway to establish a Darwin office and hire key personnel. ICG’s recently expanded team and capabilities across investment and compliance will ensure a smooth implementation and management of NTIDF investments along with ICG’s existing investment strategies.

The NTIDF reflects a growing preference among investors for single client account structures that are geared to specific objectives and require specialist capability and focus.

ICG will continue to build on its separate account business in response to client demand and is actively engaging investors both domestically and globally on specific transaction opportunities.

As previously communicated to investors, the investment focus and scope of the NTIDF is on development projects in the Northern Territory, and is highly complementary to the Diversified Infrastructure Trust and the Energy Infrastructure Trust. The management focus and investment strategies remain unchanged for these products with both funds given priority asset allocation ahead of the NTIDF mandate.

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Infrastructure Capital Group appoints new director and associates

Infrastructure Capital Group (ICG) is pleased to announce the appointment of a director and two associates to support growth across its funds and separate accounts businesses.

Former Principal of KPMG Direct Investments Edward (Ed) Lloyd joins ICG as a Sydney-based Director, bringing over 15 years’ experience advising on infrastructure portfolios and transactions.

ICG Chief Executive Tom Laidlaw said “Ed will play a critical role in building out the firm’s separate accounts business which is gaining strong momentum”.

“Ed’s insights and knowledge about maximising value and growth from infrastructure assets will be key in delivering bespoke mandates that suit investor preferences for asset control and exposure,” Mr Laidlaw said.

“The growing trend towards separate accounts augers well for ICG given our deep expertise in originating, developing, managing and divesting mid-market infrastructure assets across markets.”

Prior to KPMG, Ed worked as a director of Colonial First State Global Asset Management’s Infrastructure Investment division in Sydney and London, following roles with Hastings Funds Management and Macquarie.

Mr Laidlaw said the team has also grown with two new associates joining ICG’s investment team in Sydney and Melbourne to work across the firm’s Diversified and Energy Infrastructure Trust Funds and separate accounts, which collectively manage over A$1.5 billion.

The expanding team follows ICG’s investment in Port Hedland International Airport and sale of ANZ Stadium to the NSW State Government earlier this year.

“We are extremely well resourced and positioned to partner with institutional clients looking for bespoke mandates covering Australia’s mid-market infrastructure sector,” Mr Laidlaw said.

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ICG sells 100% interest in ANZ Stadium to NSW Government

Infrastructure Capital Group Ltd (ICG) announces that it has sold its 100% interest in ANZ Stadium to the NSW Government with completion occurring on 1 July 2016. This ends ICG’s ten-year association with ANZ Stadium and has provided very successful investment for ICG’s unitholders.

ICG Ownership Period
ICG’s Diversified Infrastructure Trust acquired ANZ Stadium in an on market takeover in early 2007. Over the period 2007 to 2009, the business was recapitalised and ICG oversaw a significant restructure of operations. These included a management and board restructure, acquisition of the catering business, internalisation of the facility management functions and termination of the external operator agreement. These changes materially reduced operating costs and improved operational efficiencies and effectiveness.

Following this restructure, focus shifted to revenue enhancements and customer contracts were lengthened, new sporting customer contracts were added and further event diversification was sought. ANZ Stadium is now recognised as a major concert and event destination with regular annual events attracting sell-out crowds.

In addition over recent years, the catering business assumed an outward focus and now provides services to a number of external venues and the core business attracted more concerts and occasional events, often in partnership with Destination NSW, NSW’s body for major events and tourism. In more recent times, the management team was awarded the contract to manage the new Perth Stadium, due for completion in late 2017.

ICG’s Managing Director Mr Tom Laidlaw said “Since 2007, ANZ Stadium under ICG management more than doubled the annual cash operating profit whilst at the same time de-risked the business. It has been a superb investment for DIT unitholders and clearly shows the investment and asset management capabilities of ICG.” Mr Laidlaw added that the decision to sell ANZ Stadium back to the NSW Government was taken after the Government confirmed the funding for a $700m upgrade of the stadium and it was appropriate that this was completed under Government ownership.

Further information
For further details, please contact Emma Cullen-Ward, OneProfile Communications, on +61 2 8915 9900 or +61 414 989 137.

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The Asset Triple A Asia Infrastructure Awards 2016

Infrastructure Capital Group is pleased to announce that the Hallett Hill No 2. Wind Farm bond issue won the Best Green Bond Project of the Year Award for both the Asia region and Australia at The Asset Triple A Asia Infrastructure Awards.

Hallett Hill is a 71MW, 34 turbine, wind farm located in mid‐north South Australia near the township of Mt Bryan. Hallett Hill has been operational since 2009. Hallett Hill is wholly owned by the Energy Infrastructure Trust (EIT) which is managed by ICG. It is backed by 25‐year Offtake and Asset Management Deeds with AGL Hydro whose obligations are guaranteed by its parent AGL Energy (S&P: BBB (stable).

ICG acted as financial and ratings adviser to Hallett Hill.

Best Deals by Country Sector Award



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Australia’s ICG in A$1bn fundraise

Author: Nia Tam

Source: Infrastructure Investor

Peter Welch, Global Head of ICG Capital, talks to Nia Tam, Hong Kong based reporter at Infrastructure Investor, about the specialist asset manager’s view that fair value in the mid-market is being driven by asset recycling programmes, strained government and corporate balance sheets, non-core divestments from corporates, and steady flow of organic growth opportunities. He also points to growing interest from domestic and international investors for bespoke exposures and partnership programmes to suit their preferred level of engagement and exposure.

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ICG plans $1bn raising as stadium sale talks continue

Author: Andrew White
Source: The Australian

NSW Premier Mike Baird discusses the future development of ANZ Stadium with reporters yesterday.

AFL chairman Mike Fitzpatrick’s majority-owned infrastructure fund manager is set to embark on a $1 billion capital raising as negotiations continue with the NSW government to sell its highest-profile asset, the former Olympic stadium at Homebush.

Infrastructure Capital Group holds the rights to occupy and manage ANZ Stadium for the next 15 years but is discussing a sale after NSW Premier Mike Baird yesterday changed tack on a city-wide upgrade of Sydney’s stadiums. ANZ Stadium is set to be the major recipient in a $1.6bn state government makeover of Sydney’s main rugby union, league and soccer venues that would convert the Homebush oval arena to a roofed, rectangular venue.

ICG has owned the rights since 2007 when the then ANZ Bank-owned infrastructure investor bought out the then publicly listed owner of the former Sydney Olympics centrepiece. Mr Fitzpatrick, who founded the pioneering Hastings Funds Management business before selling it to Westpac, led a buyout of ICG from ANZ in 2009.

The negotiations come as ICG chairman and shareholder Andrew Pickering leads a roadshow to investors to raise up to $1bn for two funds that focus on mid-market infrastructure assets such as airports, ports and renewable and conventional electricity generation.

“These negotiations will have no impact on our capital-raising plans,” Mr Pickering said of the stadium talks.

The stadium is held in a $450 million Diversified Utilities Fund that also includes a stake in the Port Hedland International Airport that was bought for $165m in partnership with AMP last year, as well as South Australia’s Flinders Ports and Newcastle Coal Infrastructure Group.

Mr Pickering said ICG had doubled earnings from ANZ Stadium over nine years by lifting the number of events to more than 40 a year, including the rugby league grand final and State of Origin matches, big name concerts by AC/DC, Taylor Swift and the Foo Fighters and other one-offs such as monster truck shows. However, the Sydney Swans AFL team has abandoned a long-term deal to play three matches a year at the 87,000-seat venue a year early, a development Mr Pickering said had created an “opportunity’’ to find new events.

“It certainly makes your infrastructure life a little more interesting, discussing whether the Foo Fighters are doing one ¬concert or two,’’ he said. ICG is also part of the consortium that won the right to develop and operate a new AFL stadium in Perth that is expected to be operating by 2018.

ICG wants to capitalise on red-hot investor demand for infrastructure assets with a raising that would increase its funds under management by two-thirds and give it more firepower to bid for assets as well as funding development projects.

Mr Pickering, a former lawyer who cut his teeth at Queensland Treasury and China Light and Power before joining ICG, said there was better value to be found in assets between $100m and $1bn than the headlining multi-billion-dollar port and power privatisations that typically attracted big international and local superannuation and sovereign wealth funds.

Deals like the sale of Ports Botany and Kembla to IFM Investors, Crown Castle communications towers to Macquarie Group and Iona Gas storage to Queensland Investment Corporation have gone for multiples of 22 to 25 times earnings before interest, tax, depreciation and amortisation. But over the same period the ANZ Terminals, Port Hedland Airport and the Hallet 4 and Macarthur Wind farms have gone for prices representing 11-14 times EBITDA.

“Those bigger funds, whether it is AustralianSuper or ADIA etc … every deal where they have a chance to deploy $500m or more, they have to look at it because they are only going to win one in every four or five,’’ ICG managing partner Tom Laidlaw said. “And equally they are not interested in chasing something for $100m because they will end up with 300 assets in their infrastructure portfolio and it gets too hard to manage.’’

Mr Pickering said the funds were also seeing an increasing pipeline of investments coming through development projects such as waste to energy plants that ICG could fund in exchange for equity. “If we have got the internal resources to help with financing and with deal analysis and throw in the benefit of some early stage development capital we can secure the rights to invest in the project on a proprietary basis,’’ Pickering says.


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