Germany-based investment manager PATRIZIA and Japan’s trading an investment firm Mitsui have committed to invest up to AUD 70 million ($44.53 million) in a major solar and battery development program in Australia through the Asia Pacific (APAC) Sustainable Infrastructure Fund (A-SIF).

PATRIZIA said in a statement on Monday that the deal marks the debut investment for A-SIF, which is a joint venture between PATRIZIA and Mitsui.

According to the statement, the investment comprises an equity interest in YES Group, a energy solutions provider in Australia, together with a commitment to fund the development of a portfolio of predominantly small-scale solar photovoltaic (PV) generation and battery energy storage solutions throughout regional Australia.

The portfolio will have the potential to deliver over 150MW of capacity once fully operational.

It is expected that a 150MW renewables portfolio will offset over 335,000 tonnes of carbon dioxide (CO2) each year (compared to coal fired energy) and provide sustainable, green power to approximately 65,000 households.

According to the statement, the strategic decision to focus on a portfolio of small-scale generation assets will ensure diversification across the distribution network, shorter and predictable construction times, less transmission losses, less regulatory risk and the advantage of being able to spread assets geographically to target sites with higher solar irradiance.

The development locations in rural Australia will help unlock value in under-utilized or redundant land for the community and generate local and skilled employment opportunities throughout a circa 30-year lifecycle.

The investment in batteries, both integrated with solar as well as standalone, will provide additional support for the grid during Australia’s period of energy transition.

It is also noted that the investment in YES Group will ensure the strategy is implemented by an experienced and established operational team.

Founded over 15 years ago, YES Group is a licensed, vertically integrated energy solutions provider, covering energy markets services and retailing, project origination and engineering, procurement, and construction (EPC), high voltage services and asset management.

The company has successfully installed over 1,700 rooftop solar systems (sub 1MW), over 120 ground mount solar farms (sub 5MW) and works on major infrastructure projects across the national electricity network.

PATRIZIA and YES Group have worked together since September 2020, delivering over 60MW of approved projects with a further pipeline of over 70MW identified, in addition to the target of over 150MW through A-SIF.

“Decarbonization and climate change are two core megatrends that underpin our global investment philosophy at PATRIZIA,” said Saji Anantakrishnan, Head of Infrastructure for Australia and Asia at PATRIZIA.

“As a thoughtful and strategic investor for our clients, this first deal for A-SIF demonstrates our strong conviction to energy transition and the attractive long-term returns renewables can generate for our institutional investors,

“Our vision in APAC for both PATRIZIA’s real assets platform and our flagship mid-market fund is to collaborate with like-minded investors and regional partners to build a portfolio of infrastructure assets that deliver positive sustainable outcomes,” he said.

PATRIZIA completes the deal as global investment in solar energy is expected to outstrip oil production for the first time ever, with total spend on solar power forecast to hit $382 billion this year according to the International Energy Agency.

This strong investor interest in renewables is reflected in PATRIZIA’s 2023 client survey, in which 55 percent of its international institutional investors said they planned to increase the share of renewables in their portfolios over the next five years.

It is noted that A-SIF is the second fund from the PATRIZIA-Mitsui collaboration, following the launch of the Emerging Market Infrastructure Fund (EMIF) in 2008, which also had a focus on APAC.

With a 39-year track-record, PATRIZIA manages around EUR 58 billion ($61.05 billion) asset under management (AUM) globally for its clients, of which EUR 10 billion ($10.53 billion) is for institutional investors who are located in Asia-Pacific.

Mitsui is a global trading and investment company with a presence in more than 60 countries and a diverse business portfolio covering a wide range of industries.

The company identifies, develops, and grows its businesses in partnership with a global network of trusted partners including world leading companies, combining its geographic and cross-industry strengths to create long-term sustainable value for its stakeholders.

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