Australian power and gas company Alinta Energy announced it has sealed an AUD-1.72-billion (USD 1.10bn/EUR 1.01bn) deal to sell certain assets in the remote Pilbara region in Western Australia in a push to secure funds for its renewables and energy storage projects.
The buyer is Australian energy infrastructure firm APA Group (ASX:APA) which said the deal provides a significant growth platform to develop and operate remote-grid energy solutions for resources companies in the Pilbara region, such as BHP, Roy Hill and FMG.
The transaction encompasses gas and solar power generation, gas transmission, battery energy storage systems (BESS) and electricity transmission assets, as well as projects under development.
Namely, the assets to be offloaded include 60 MW of operating solar, 35 MW of operating battery and over 1 GW of development pipeline of wind, solar and battery storage. It also includes 442 MW of operating gas generation capacity, with an additional 60 MW development pipeline, about 200 kilometres (124 miles) of operating transmission lines with a 600-kilometre project pipeline, as well as an 11.8% stake in 203 TJ/d Goldfields Gas Transmission Pipeline.
The targeted operations reported revenue of AUD 235 million and EBITDA of AUD 124 million in the fiscal year ended on June 30, 2023.
Alinta said the divestment will strengthen its capacity to jointly fund and deliver its ambitious renewables and storage projects, including the 1-GW Spinifex offshore wind project in Portland, Victoria, and the 900-MW Oven Mountain Pumped Hydro project in New South Wales. Earlier this month, the company also unveiled a plan to build a 100-MW battery energy storage facility in Western Australia.
Alinta’s operations in the South West of the state, including its retail gas operations and projects such as the recently announced Wagerup big battery, are not part of the sale.
The transaction between Alinta and APA, whose value is in enterprise terms, is expected to close in the fourth quarter of 2023. APA said it intends to fund the purchase through new shares issuance of AUD 675 million, an AUD-75-million security purchase plan (SPP) as well as new debt facilities.
(AUD 1 = USD 0.645/EUR 0.592)