WAM Alternative Assets is excited to announce a compelling new addition to the investment portfolio: Microgrid Power, a strategic private equity investment into the renewable energy market via our investment partner, Adamantem Capital. Microgrid Power is capitalising on the rapidly expanding demand for renewable energy by offering a smart solution for shopping centres, offices, warehouses and other commercial, residential and industrial buildings at competitive prices.
Microgrid Power’s innovative model involves leasing roof space on buildings, installing solar panels and battery systems, and delivering cost-effective renewable energy directly to tenants. This system reduces emissions and creates significant cost savings for both property owners and tenants through renewable energy generation and wholesale pricing advantages.
This translates into predictable and robust returns for Microgrid Power, with each new site generating a secure 20-year stream of contracted cashflows from reliable energy users. WAM Alternative Assets’ investment, leveraging Adamantem Capital’s proven track record in scaling businesses, will accelerate the development of numerous contracted sites alongside existing operational assets. We anticipate a strong return on invested capital in the range of 2.5x to 3.5x, reflecting the inherent value and growth potential of this private equity investment.
By establishing embedded power networks, Microgrid Power becomes an integral part of each site’s infrastructure, often enhancing the overall value of the property. With every additional site, Microgrid Power adds to its growing portfolio of distributed energy resources which has the following impacts: 1) reduce emissions from electricity that would otherwise be drawn from the grid; 2) provides scale benefits in the negotiation of competitively priced energy contracts and; 3) increases potential compensation for the associated benefits that distributed energy resources can provide to the national electricity grid. Under the guidance of the highly experienced team at Adamantem Capital, Microgrid Power is well-positioned to capture significant market share and drive substantial earnings growth.
The shift towards renewable energy in Australian real estate is gaining significant momentum, supported by key regulatory drivers such as national and state-based renewable energy targets, the National Australian Built Environment Rating System (NABERS) system, and increased reporting requirements. Notably, properties with strong environmental credentials and energy efficiency are experiencing enhanced valuations and attracting premium rental income.
WAM Alternative Assets’ investment in Microgrid Power aligns with our focus on high-growth sectors and key investment themes with strong long-term tailwinds, such as the energy transition. The business has significant scope for growth, is underpinned by long-term contracted revenues and is a valuable addition to the WAM Alternative Assets investment portfolio.
