Investment manager Foresight Group has launched a green debt fund, which will make loans to small-scale wind and solar projects in Australia. It is claiming a first for the local market.
Foresight wants to raise $150 million for the Foresight Renewable Energy Income Fund. It will make loans of $5 million to $30 million on projects. Each loan will be structured under a sustainability framework certified by the Climate Bonds Initiative and verified by the Carbon Trust.
Loans will be priced at a 4 to 4.5 per cent margin over the RBA cash rate. The fund will have a five-year term and the money will be raised in two or three tranches.
The fund will be open to wholesale investors.
In asset allocation terms, the loans will be classified as infrastructure debt – a sector that has performed well over the past couple of years as investors have turned to bond proxies.
Foresight’s head of Australia Kim Nguyen says the fund will be the first to pool capital into a series of CBI-certified loan and will give wholesale investors access to an asset class that has typically been available only to institutional investors.
Nguyen joined Foresight earlier this year after working at Hastings Funds Management, Origin Energy and Macquarie Group.
The renewable Energy Income Fund is UK-based Foresight’s first wholesale fund in Australia. The company claims to be the largest institutional investor in solar in Australia, with 250MW of projects.