The fund gives Australian wholesale investors access to an asset class that has typically been available exclusively to institutional investors.
Foresight Group, a global infrastructure and private equity investment manager, has announced a first fund of loans for renewable energy infrastructure projects certified by Climate Bonds Initiative (CBI).
The Foresight Renewable Energy Income Fund, developed around a sustainability framework, has also been verified by the Carbon Trust.
The fund will provide private debt to small-scale renewable energy infrastructure projects located in Australia. According to Foresight, the fund is the first to pool capital into a series of CBI certified loans and gives Australian wholesale investors access to an asset class that has typically been available exclusively to institutional investors.
The fund will be focused purely on lending to renewable energy generation and associated infrastructure projects. An indicative portfolio of seven assets would save an estimated 5.7 million tonnes of CO2 emissions over the life of the underlying assets compared to the equivalent coal generation, claims Foresight.
“At Foresight we believe everything we do should build towards a smarter future. All investments that pass through our investment committee are governed by our propriety set of principles for sustainable investing and it is an extremely positive development to receive certification from a leading industry body such as CBI,” said Nigel Aitchison, head of infrastructure at Foresight.
“This fund will set the bar for investing into renewables in Australia, encouraging providers to be held accountable to committing funds to truly sustainable projects.”
The sustainability framework for the fund developed by Foresight includes a proprietary sustainability evaluation methodology which is used to assess projects under CBI’s programmatic certification process.
The framework has been verified by Carbon Trust to ensure it complies with the Climate Bonds Standard and is available on the fund’s website.
“This fund will set the bar for investing into renewables in Australia, encouraging providers to be held accountable to committing funds to truly sustainable projects”
Foresight said it intends to report annually on the environmental impact of the loans and their contribution to the United Nations sustainable development goals.
Foresight is aligned with leading climate change bodies, having been a signatory of the United Nations Principles for Responsible Investment for more than five years, and a member of the Responsible Investment Association Australasia and the UN Global Compact.
Climate Bonds Initiative administers an international standards and certification scheme for green and sustainable debt instruments. The Climate Bonds Standard is a science-based process designed to guide investors towards projects that contribute to addressing climate change.
“Australian investors – whether they are retail, wholesale or institutional – are becoming more climate-aware and increasingly seeking domestic green infrastructure opportunities, that have an ongoing and verifiable environmental impact,” added Sean Kidney, CEO of Climate Bonds Initiative.
“This latest offering from Foresight to wholesale investors reflects that growing demand. It’s another innovative step in the development of the Australian market.”
Since 2017, Foresight has set out to establish itself as one of the largest solar investors in Australia: managing a $400m portfolio including four solar farms in Queensland and the 110MW Bannerton project in Victoria; a 192 hectare solar farm that provides clean energy to the Melbourne Tram network which can generate enough clean electricity to power the equivalent of 30,000 homes.
You might also like: