France's Engie looks to set up renewables fund in Australia

MELBOURNE (Reuters) - French energy company Engie plans to set up a renewable energy investment fund in Australia to speed up investment in wind and solar farms, its Australian head said on Thursday.

FILE PHOTO: A logo of French energy company Engie is seen at an office building in La Defense business district in Courbevoie near Paris, France, October 12, 2019. REUTERS/Regis Duvignau

The plan is to find one or more partners to invest in a fund to develop 2,000 megawatts (MW) of wind and solar farms in the next 10 years, including the 165 MW of wind power Engie Australia has already installed and 800 to 1000 MW of wind and solar projects it has on the drawing board, Australia and New Zealand Chief Executive Augustin Honorat said.

“It’s a way to grow faster,” Honorat told Reuters in an interview.

He said there was strong appetite from foreign and local infrastructure and pension funds and the finance community for the planned fund, which he expected would take a few months to set up. He declined to put a size on the fund.

Engie, which shut its Hazelwood coal-fired power plant and sold its other coal-fired plant in Australia in 2017 as part of a global exit from coal, sees Australia as one of 20 growth markets globally for expanding in renewables.

While many power producers say Australia’s uncertain energy policy is deterring investment in new capacity to replace ageing coal-fired plants, which still generate more than 60% of the nation’s power, Honorat said Engie was focused on its customers’ desire for clean power.

“There’s a lot to do here because of that energy transition,” he said.

Engie on Thursday said it had signed a five-year deal to supply L’Oreal Australia with 100% renewable energy through a fixed-price power purchase agreement, and sees more opportunities for corporate power deals.

Engie has long partnered with Japan’s Mitsui & Co in the A$5 billion of investments it has made in Australia, and said Mitsui is set to invest in the renewables fund.

Mitsui’s Australia spokesman was not immediately available to comment.

Australia’s top power producer, AGL Energy, set up a similar fund in 2016, the Powering Autralian Renewables Fund (PARF), with Queensland Investment Corp, together investing A$1 billion in equity to develop 1,000 MW of renewable projects.

Reporting by Sonali Paul; editing by Richard Pullin