Investec Targets A$2 Billion of Australian Wind Farms

By Angela Macdonald-Smith

Sept. 25 (Bloomberg) -- Investec, the South African investment bank, intends to develop more than A$2 billion ($1.7 billion) of wind-power projects in Australia to tap a government program encouraging increased use of renewable energy.

The bank won planning approval this week for a A$700 million venture in Western Australia and is seeking clearance for a A$210 million project in Victoria state, said Mark Headland, responsible for renewable energy developments at the bank's Australian unit. Those will be followed by a larger project, costing at least A$1.2 billion, in Queensland, he said.

Australia's Labor government has committed to a target of increasing use of renewable energy to 20 percent of electricity supplies by 2020 to tackle global warming. Conergy AG, Origin Energy Ltd. and Mitsui & Co. are among companies seeking to gain from the clean-energy target, which should ensure revenue for wind and solar projects that otherwise wouldn't be profitable.

``We're very excited about the government's impending 20 percent renewables target; it's what drives our interest in becoming involved in these projects,'' Adelaide-based Headland said late yesterday in a telephone interview. ``The key to the process is obviously the market support implicit in'' the regulations that will underpin the target, he said.

The government has set a timetable of having its renewable energy target legislated by the middle of next year. It proposes to aim for an extra 45,000 gigawatt-hours of renewable energy supply by 2020, which, with existing supply of about 15,000 gigawatt-hours, will take 2020 use to 60,000 gigawatt-hours.

Collgar, Oaklands Hill

Investec will probably start detailed design work on the 270-megawatt Collgar project, about 295 kilometers (183 miles) east of the Western Australian capital of Perth, in the first quarter of next year, Headland said. The project will produce enough electricity to power about 160,000 homes.

Similar work should get underway on the 43-turbine Oaklands Hill project south of Glenthompson in western Victoria state about the same time, depending on approval, he said.

The two projects, Investec's first wind energy ventures in Australia, may start operating in late 2010, Headland said. The Coopers Gap project, about 180 kilometers northwest of the Queensland capital Brisbane, will involve as many as 250 turbines and may start up in early to mid-2011, Headland said.

Investec expects to lodge a development application for the 500-megawatt Coopers Gap venture within 2-3 months after getting a ``strong level of support'' at a public open day last month, he said. The project will power about 249,000 homes.

Ownership Options

The Johannesburg-based bank will ``consider its options'' for the final ownership of the projects, and may continue to hold 100 percent or sell stakes to partners, Headland said. The ventures may be project financed or funded from Investec's balance sheet, he said. Development work is being carried out with Canberra-based Windlab Systems Pty., which Investec Bank (Australia) Ltd. also partners in wind energy projects in New Zealand.

AGL Energy Ltd., Origin and closely held TME Australia are among companies that have won approval for, or bought rights to build, wind energy projects in Australia this year, while Conergy, Germany's largest solar power company, announced plans in October to spend A$2 billion to build the country's biggest wind energy project. Mitsui is also studying developing a wind power business in Australia.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net