REG - VH Global Sustain. - Acquisition of 2 additional sites in Australia

VH Global Sustainable Energy OpportunitiesAnnouncement

28/03/2024 07:00

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RNS Number : 5819I  VH Global Sustainable Energy Oppt.  28 March 2024

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
(mailto: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)

ukfundcosec@apexfs.com (mailto:+ukfundcosec@apexfs.com)

 

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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