Singapore’s GIC and Temasek have taken the unusual step of combining forces to back the take-over of Australia’s largest integrated power generator and energy retailer, with a view to supporting the country’s net zero goals.
Brookfield, along with GIC and Temasek, are set to acquire Origin’s Energy Markets business, with the intention of investing at least A$20 billion in 14GW of new build renewables and storage to slash the carbon footprint. The investment will enable the retirement of one of Australia’s largest coal-fired power generation plants, reduce emissions produced by the business by more than 70%, and would represent 20% of the new utility-scale renewables capacity required up to 2030. Origin’s integrated gas business, which owns a 27.5% stake in Australia Pacific LNG Project (APLNG), is being acquired by EIG’s MidOcean Energy.
The purchase agreement values Origin at an enterprise value of A$18.7 billion (US$12.4 billion), representing a 53.4% premium to the company’s unaffected share price. The Origin Board unanimously recommended shareholder approval.
The two Singaporean investors rarely invest in the same companies and when they do it is in venture capital funding rounds. This is believed to be the first deal in which the two investors, with a combined capital of nearly US$1 trillion, have joined forces in the acquisition of an infrastructure asset. However, Global SWF believes this will remain an exception as the two investors seek to maintain their distinct identities and mandates – unlike Canadian public pension funds and Abu Dhabi’s sovereign wealth funds that frequently join forces in infrastructure investments.
GIC has been aggressively pushing investments in Australia since it opened its new office in Sydney in June. Since it started investing in Australia in 2005, it has deployed around US$20 billion of capital, according to data from Global SWF. More than three quarters of that amount has been spent in properties, from hotels and malls to offices and student housing.
Australia’s burgeoning renewables sector is a key target of the Singaporean sovereign wealth fund. Last year, GIC made a major investment in InterContinental Energy (ICE), the developer of two hydrogen projects in Western Australia with combined capacity of 30 million tonnes per annum (mtpa) of ammonia from renewable sources.
ICE is one of the backers of the Western Green Energy Hub (WGEH) project, which plans to build 50GW of wind and solar generation capacity to power electrolysers to produce around 20mtpa of green ammonia, along with the Asian Renewable Energy Hub (AREH) that plans to install 26GW of renewables capacity to produce around 10mtpa of green ammonia. The Australian hydrogen projects represent a major portion of ICE's portfolio that also include ventures in Saudi Arabia and Oman. Its 200GW of onshore wind and solar capacity will enable production of more than 14mtpa of green hydrogen or 80mtpa of green ammonia.
