article on investec and cnm

Investec wave energy omen
Print GREENCHIP: Giles Parkinson | April 20, 2009
Article from: The Australian

THE $250 million financing agreement provided by Investec Australia for Carnegie Corp's planned wave energy farm is firm evidence that funding is available for the right renewable energy projects. Investec is seeking to carve a niche in the renewable energy sector and has been an active lender and equity investor.

Investec has a joint venture with a CSIRO spin-off called Windlab Systems, which specialises in identifying good wind farm sites, and the two are developing a $600 million, 200MW wind farm at Collgar in Western Australia. Investec has also warehoused assets for the Viridis Clean Energy fund, and has sold wind farm projects to Contact Energy in New Zealand and AGL and lent or taken equity interests in other renewable energy projects.

"The financing market is very tough, particularly debt finance," says Peter Mansfield, the head of project and infrastructure finance. "But if you've got a well-structured project with good off-take arrangements, then projects can still be done. We lend to green and other infrastructure projects that are a little more offbeat -- a little less proven. It's more complicated, but we can extract higher returns as lender for those projects."

The Carnegie agreement -- which is subject, among other criteria, to the company winning a grant under the Renewable Energy Demonstration Program -- has been structured so that Investec is providing finance to a separate entity that will own the project. Mansfield says Investec has been talking to Carnegie for some time, along with other geothermal, wave and tidal energy developers, none of whom need bother to knock on the doors of the Big Four banks. "Renewable energy is a niche area and we are a niche specialist bank," Mansfield says. "It suits our risk appetite."

Geothermal applications

CARNEGIE was one of four listed companies that confirmed this week that they had lodged applications for funds under the REDP. Carnegie has not revealed the sum it is looking for but the 50MW wave energy demonstration plant it wants to build has an estimated cost of $300 million.

The other three publicly announced applications came from listed aspiring geothermal energy companies. Geodynamics, which is just completing a 1MW pilot plant for the town of Innamincka, has applied for $90 million in funding for an expanded facility, Petratherm has put its hand up for one-third of the estimated $200 million cost of a 30MW geothermal energy plant near the Beverley uranium mine in South Australia, while Greenearth Energy is applying for one-third of the estimated $60 million cost of a 10.7MW demonstration plant near Geelong.

It was hoped the Government would announce its allocations by June 30, but a spokesman for Resources and Energy Minister Martin Ferguson said last week the announcement would not be made until the second half of 2009.