Chinese state-owned companies are expected to boost their investment in Australia’s expanding renewable energy sector, attracted by a national leadership that is more favourable to the industry than its forerunner.
With six to eight state-owned enterprises already involved in or looking closely at Australian energy assets, Melbourne-based financial advisors SILC Group has said more deals were on the cards, with so-called green power coming under particular focus.
That move followed its $2.5 billion purchase in December of Pacific Hydro, a company which has wind farms in Australia, Brazil and Chile.
“There was always interest, but now there’s increased interest from the Chinese,” Peter Munns, an executive director at SILC, which works with China state-backed firms, told Reuters.
“Chinese companies always like our rule of law, our currency risk and stable economy.
After coming to power last year, the government led by the conservative Liberal-National Prime Minister Malcolm Turnbull in December reversed a decision by the previous administration banning the country’s clean energy fund from investing in wind power projects, opening the door to more deals in the sector.
Mr Munns told Reuters in an interview that Chinese firms were looking for projects with long term off take agreements that would get them a foot in the door in Australian markets, as well as local expertise that would help them grow.
“Most want to do solar as well. But they probably think that’s a couple of years down the track before it’s as economic and as viable as wind is.”
A unit of China Shenhua is already part operator of several wind farms in Tasmania, while Beijing Jingneng Power has a stake in the Gullen Range wind farm in New South Wales.
Other Chinese state-owned companies that have said they are looking at Australian energy assets include Shanghai Electric Power and Cecep Wind-power Corporation.
Meanwhile, a tender for the poles and wire firm Ausgrid in New South Wales, to be decided by mid-2016, has attracted the attention of China State Grid and Southern Power.
State Grid already has a 41 per cent stake in South Australia’s electricity grid.