Infigen Energy Mulls Shedding U.S. Wind Farms

Australia under pressure to fix renewable energy target deadlock; 45 wind farm projects stalled.

Australian wind farm operator Infigen Energy Ltd is exploring the sale of 18 U.S. wind farms, worth about A$500 million ($409 million), so they escape impact from the uncertain future of Australian state rebates for renewable energy firms.

Infigen has hired advisers to consider ways of splitting U.S. assets from its six Australian wind farms, so consequences suffered by Infigen from a political deadlock over the rebates would not filter down to assets on the other side of the world, Managing Director Miles George told Reuters on Wednesday.

"We have contemplated ... the possibility of separating our Australian and U.S. businesses so that the U.S. business can be financed out of the U.S., where we think it would get better value recognition and make more sense," George said.

"Separating could be either a sale of the entire U.S. business or a refinancing which would see us raise equity into the U.S. business at the U.S. business level," he said.

George said the company has appointed advisers but declined to name them.

The sale ratchets up pressure on Australia's conservative government to resolve a deadlock with the opposition Labor party over how much of the country's energy should come from renewable sources by 2020.

The government effectively wants to cut the target so it is proportional to declining electricity use, while the opposition, which set the target in 2009, wants the amount to remain fixed.

Negotiations between the two broke down last year, resulting in a collapse in the price of the market-traded certificates the state gives renewable energy companies as an incentive.

Some 45 wind farm projects in Australia have been approved for development but appear to have stalled because of uncertainty about state support, according to the Clean Energy Council.

Meanwhile, "the environment in the U.S. at the moment is strong, equity markets are strong, renewable energy market prospects are strong, so it kind of makes sense to do something," Infigen's George said.

A spokesman for industry minister Ian Macfarlane agreed the renewable energy industry faced uncertainty but said the current target was not sustainable or achievable.

"A recalibrated (target) will better reflect market realities, which will in turn create a more stable environment for long-term investments," the spokesman said in an email.

Labor's shadow environment minister Mark Butler was not immediately available for comment.

Infigen shares were up 4 percent in a higher overall market.
 

By Byron Kaye