Impact launches $100M solar fund

Melbourne-based Impact Investment Group (IIG) is seeking $100 million for its unlisted Solar Income Fund.

The fund, which has exclusive rights to buy $60 million worth of Australian solar infrastructure projects in varying stages of construction, expects to deliver stable, long-term cash returns by investing in commercial and utility-scale solar farms secured by long term off-take arrangements with high quality counterparties including local and state governments.

It plans to deliver a 10% pre-tax internal rate of return and is seeking $50 million in equity from multiple investors and $50 million in debt, probably from a single lender.

Fund assets are expected to power 9,000 homes and abate 48,000 tonnes of carbon dioxide emissions each year once fully invested. During the life of the fund the pool of assets are expected to reduce carbon emissions by 1.2million tonnes.

IIG says 270 jobs will be created during construction of fund assets and there $57 million in savings from health and environmental costs associated with fossil fuels.

Over the life of the fund, clean power generation is expected to save 16,000 Australians from pollution-related diseases.

The fund is led by renewable energy industry expert and IIG Head of Renewable Energy Infrastructure Lane Crockett, formerly executive general manager of Pacific Hydro, and overseen by an independent board chaired by Ross Garnaut.

Seed assets include the Karratha Solar Farm in Western Australia and the Mount Majura and Williamsdale solar farms in the Australian Capital Territory. The fund buys only operating solar farms which have long-term contracted or regulated off-take arrangements with Australian governments and investment-grade commercial counterparties, and will range between 1MWp-30MWp in size.

Investment is being offered to sophisticated or wholesale investors, including self-managed super funds, with a minimum investment of $100,000.

The 300-client base of IIG forms the initial target investors.

IIG is an impact investment funds manager and co-investor with more than $400 million in funds under management across property and renewable infrastructure. The mission is to shift capital to investments that blend financial returns with deep social and environmental impact.

Owned by chief executive officer Chris Lock and Small Giants, the family office of Daniel Almagor and Berry Liberman, IIG is an active and ethical manager that benchmarks its fees to the long-term performance of its assets.

It is a certified B Corporation and a member of the Responsible Investment Association Australasia.