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GSEO commits £50 million to Australian energy transition

News Team, 03/08/2021

VH Global Sustainable Energy Opportunities (GSEO) has acquired a portfolio of distributed solar generation assets in Australia, with plans to build embedded battery storage capacity.

The London-listed investment trust has committed £50 million to the deal, which it believes will contribute to the Australian energy transition. It will be split into two deployment tranches, the first of which will be for £15 million.

The first tranche involves the acquisition of two operating solar photovoltaic (PV) sites, totalling 17MW DC, in South Australia and Queensland. A critical part of the investment strategy will be to help stabilize the grid and improve renewable power generation by adding one to two hours of battery storage capacity at each site.

Both initial solar PV generation assets combine merchant sales and long-term corporate PPA revenues as well as large-scale Generation Certificates (LGCs). In addition, GSEO believes investors will also benefit from revenues stemming from profitable energy arbitrage opportunities and frequency services revenues.

The deployment programme will continue to extend across the country and focus on remote sites that are typically located close to clusters of commercial and industrial consumers. The aim is to provide greater access to clean and dependable energy in remote load centres while helping accelerate the Energy Transition in Australia.

Victory Hill will be partnering with Birdwood Energy which was founded by energy entrepreneurs Scott McGregor, Leigh Newbery and Graeme Ludlow. They bring extensive expertise in the optimisation of hybrid solar and battery storage systems alongside a network of high quality commercial and industrial customers to enhance the value of the portfolio.

The levered return is expected to be ahead of the company’s target annual dividend yield of 5 percent and be in line with its target return of 10 percent.

To date, approximately 59 percent of the net proceeds raised on IPO have now been committed or deployed.

Richard Lum, co-chief investment officer of Victory Hill Capital Advisors, adviser to GSEO, said: “We are very cognisant of the journey which Australians have embarked on to meet the challenges of addressing climate change, whilst ensuring that the country benefits from a reliable energy system in which renewable power generation becomes fully integrated. We are thrilled through this acquisition, to be part of this strong momentum to achieving global sustainable energy through investing in the fight against climate change and ensuring energy access for local communities and businesses in Australia.”

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