Chinese firms hunt for ‘greener’ pastures in Australia
With a more receptive local government and a slowing economy at home, Chinese green energy firms are looking for “greener” pastures in Australia.
Six to eight Chinese state-owned enterprises are looking to boost their investment in Australia’s expanding renewable energy sector, according to Melbourne-based financial advisors SILC Group, which works with China state-backed firms. SILC told Reuters that more deals were on the cards with so-called green power.
This follows on the heels of State Power Investment Corp’s 300 million-Australian-dollar ($230 million) buyout of a wind farm in New South Wales last week, as well as its $2.5-billion purchase in December of Pacific Hydro, a company that 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, told Reuters. “Chinese companies always like our rule of law, our currency risk and stable economy. They like renewables, they also like poles and wires because the revenue is underpinned by regulation.”
A big impetus for the change was the election of Prime Minister Malcolm Turnbull in December. Tony Abbott, the previous prime minister, called wind farms “ugly” and “noisy” and had banned the country’s clean energy fund from investing in wind power projects. Turnbull reversed the ban, opening the door to more deals in the sector.
Munns told Reuters in an interview last week that Chinese firms want to get a foot in the door of Australian markets, as well as gain the local expertise that would help them grow.
“They don’t just want to have one wind farm here, they want to have a portfolio,” said Munns. “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.”