VH Global Sustainable Energy Opportunities plc
28 March 2024
VH Global Sustainable Energy Opportunities has agreed to acquire and build two solar and storage hybrid sites in Australia for £16.9m
VH Global Sustainable Energy Opportunities plc (the "Company" or "GSEO") - the London-listed company managed by Victory Hill Capital Partners LLP focused on the energy infrastructure that is essential for the global transition towards net zero - is pleased to announce that it has agreed to acquire and build two fully-permitted solar PV sites with co-located battery energy storage systems ("BESS") in New South Wales ("NSW"), Australia for a total consideration of £16.9m. This investment is part of the Australian solar PV and storage investment programme (the "Australian Energy Transition Programme") as announced on 2 August 2021. With this investment the aggregate commitment to the programme has increased from the initial commitment of £50m to £58.5m, reflecting the progressive increase in cost of BESS procurement on the hybridised sites since initial investment was approved.
As previously announced, Phase I of the Australian Energy Transition Programme consisted of the acquisition of two operating solar PV sites in South Australia and Queensland with a combined peak capacity of 17MW (connected capacity of 12MW). Phase II involved the construction of co-located BESS to the South Australian asset, which was successfully completed in July 2023. The Company subsequently acquired and constructed three new solar PV sites of 4.95MW, located in NSW, which was completed in Q1 2024. Installation works for the co-located BESS to all three NSW sites has commenced and the sites are expected to be hybridised in Q4 2024.
Today's announcement adds two 4.95MW solar PV sites in NSW to the programme, with co-located 2-hour BESS on each site, bringing the total capacity of the Australian Energy Transition Programme to 37MW/60MWh, across seven assets. The construction of these two hybrid sites is expected to begin in Q2 2024, with completion expected in early 2025.
As with the South Australian hybrid project, which successfully captured more attractive power prices in the intraday market following the addition of the two-hour BESS, co-locating solar PV and BESS provides the system with additional renewable energy. It also supports grid stability with the storage solution, allowing the assets to better serve the needs of the Australian power market in its energy transition. Notably, GSEO expects to gain access to additional energy arbitrage as well as frequency stability services revenue streams from the co-located BESS.
Once fully operational, the portfolio is expected to combine merchant sales, frequency stability services revenues, long-term offtake contracts and sales of large-scale generation (green) certificates.
This additional investment to the Australian Energy Transition Programme is expected to support the Company in meeting its target total NAV return and annual dividend.
Birdwood Energy, our existing Australian operating partner, will serve as operating partner for these two additional sites. Birdwood Energy is an Australian specialist developer and manager in the renewable sector, with more than 25 years' experience in battery storage and renewable power generation development and operation.
Richard Lum, Co-CIO of Victory Hill Capital Partners commented:
"We continue to make progress with the continued build out of our Australian solar and energy storage hybrid programme. Once operational, these assets will play a meaningful role in providing needed renewable generation into the Australian energy system, as well as helping the system on its transition pathway to net zero. Furthermore, investors are offered a means to access interesting market pricing margins in a risk adjusted way, given we aim to hedge half of all production. We believe that the Australian market continues to offer excellent opportunities to support this ongoing transition towards net zero."
GSEO continues to support the global energy transition, with its investors benefiting from NAV growth and a progressive income stream. The Company targets a total unlevered NAV return of 10%, net of fees, and a progressive annual dividend per share, covered 1.1x as at 31 December 2023, paid quarterly (currently targeting 5.68p for the year ended 31 December 2024, a 2.9% increase vs the previous year). As further projects achieve operational status, the dividend coverage is expected to strengthen. The Company's operational assets benefit from over 90% of contracted revenues. Total leverage of the Company is 1.9% of NAV, which only includes asset-level leverage to its US asset.
www.vh-gseo.com
The Company's LEI is 213800RFHAOF372UU580.
For further information:
Edelman Smithfield (PR Adviser)
Ged Brumby + 44 (0)7540 412 301
Victory Hill Capital Partners LLP (Investment Manager)
Navin Chauhan info@victory-hill.com
Deutsche Numis (Corporate Broker)
David Benda +44 (0)20 7260 1000
Matt Goss
Apex Fund and Corporate Services (UK) Limited (Company Secretary)
About Victory Hill Capital Partners LLP
Victory Hill Capital Partners LLP ("Victory Hill") is authorised and regulated by the Financial Conduct Authority (FRN 961570).
Victory Hill is based in London and was founded in May 2020 by an experienced team of energy financiers that spun-out of a large established global project finance banking group. The team has participated in more than $200bn in transaction values across 91 conventional and renewable energy-related transactions in over 30 jurisdictions worldwide. Victory Hill is the investment manager of the Company.
The Victory Hill team deploys its experience across different financial disciplines in order to assess investments holistically from multiple points of view. The firm pursues operational stability and well-designed corporate governance to generate sustainable positive returns for investors. It focuses on supporting and accelerating the energy transition and the attainment of the UN sustainable development goals.
Victory Hill is a signatory of the United Nations Principles for Responsible Investing (UN PRI), the United Nations Global Compact (UN GC), Net Zero Asset Managers Initiative (NZAMI), a member of the Global Impact Investing Network (GIIN) and is a formal supporter of the Financial Stability Board's Task-Force on Climate-related Disclosures (TCFD).
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