Australian Economy

Industry super fund snaps up 10 pct stake in Australia’s biggest offshore wind project

Industry super fund Cbus Super has bought a 10 per cent stake in the 2.2GW Star of the South offshore wind project, the biggest and most advanced offshore wind project in the country.

Cbus, a building and construction super fund with more than $70 billion under management, says it is a “landmark” investment that will help “pioneer” the offshore wind industry.

Australian super funds have many large wind and solar projects, but rarely get involved at such an early stage – Cbus says it was encouraged to do so by the ambitious offshore wind targets set down earlier this year by the Victorian state government.

Victoria is aiming to deliver the first output from offshore wind projects by 2028, and Star of the South is expected to be one of the first. Victoria aims then to have 4GW of capacity by 2035 and 9GW by 2040 to help fill the gap of the huge coal generators that will be shut by then.

“This shows that investor confidence in Victoria’s emerging offshore wind sector is high, particularly off the back of a 9GW offshore wind target announced by the Victorian government this year and legislation passed in the federal parliament last year,” said Erin Coldham, the acting CEO of Star of the South.

“It’s pleasing to see an Aussie super fund that has been built by workers, for workers, take a stake in a project that will create thousands of jobs for Australians.”

Star of the South is the first direct investment investment in offshore wind by Cbus Super, and likely for any Australia industry super fund.

Cbus made its first direct investment in renewables with a significant stake in Bright Energy Investments, which has developed the Warradarge wind farm in Western Australia and the second stage of the Greenough River solar farm. It also holds an interest in Capital Dynamics, which owns renewable projects in the US.

“Star of the South will support, establish and grow the offshore wind industry in Australia, while assisting the Victorian government’s commitment to a net-zero emissions economy,” says Kristian Fok, the chief investment officer at Cbus.

The Star of the South project is around 45 per cent owned by a fund controlled by Danish group Copenhagen Infrastructure Partners, which is one of the largest developers of offshore wind projects in the world, with the project founders holding the remaining 45 per cent.

CIP has invested €18 billion in offshore wind and other renewable and energy infrastructure projects and aims to lift this to €100 billion by 2030. It is also pursuing offshore wind projects in New Zealand and recently announced plans for a green hydrogen island, tapping offshore wind, in the North Sea.

“The transaction highlights the significant potential of offshore wind in Australia, with the opportunity for Victoria to be a leader in the significant global growth of offshore wind.” Michael Hannibal, a partner at CIP, said in a statement.

The project, one of more than 15 offshore wind projects proposed in Australia waters, could supply up to 20 per cent of Victoria’s electricity needs, or the equivalent of around 1.2 million homes.

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