Monster Hunting Taming the Battery Storage Beast Our EXPERIENCE Means You’Ll Have a Better One
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Issue 375 EUROPE The LSE’s new green Summer 2019 opportunities ASIA Ravenhall Prison refi in Australia Issue 375 NORTH AMERICA District heating and cooling in Canada Summer 2019 LATIN AMERICA Changing dynamics in Brazilian renewables Project Finance & Infrastructure Journal MIDDLE EAST & AFRICA Bahrain signs Sitra refinery expansion POWER & RENEWABLES REPORT 2019 Monster hunting Taming the battery storage beast Our EXPERIENCE means you’ll have a better one. A leading provider of project finance agency services. No matter the type of project, you need an experienced team NORTH AMERICAN CORPORATE TRUST that can provide holistic corporate trust and agency services PROVIDER OF THE YEAR support for all aspects of the transaction. At Wilmington Trust, our keen understanding of transaction structures is supported by specific experience in executing every aspect of a deal with expertise and eciency. Our full-service, relationship-driven approach is why we’ve been at the table on some of the largest transactions in recent history, and our team stands ready to craft DOUG LAVELLE [email protected] +1 212.941.4426 a customized approach and solution for you. For more insight on how we’ve successfully supported clients on project finance transactions, contact one of our experienced professionals or visit wilmingtontrust.com/projectfinance. WILL MARDER [email protected] +1 212.941.4418 ADMINISTRATIVE AGENT | COLLATERAL AGENT | DEPOSITARY | ACCOUNT BANK | TRUSTEE | INTERCREDITOR AGENT Services provided by Wilmington Trust, N.A. Wilmington Trust is a registered service mark. Wilmington Trust Corporation is a wholly owned subsidiary of M&T Bank Corporation. Wilmington Trust Company, operating in Delaware only, Wilmington Trust, N.A., M&T Bank, and certain other aliates provide various fiduciary and non-fiduciary services, including trustee, custodial, agency, investment management, and other services. International corporate and institutional services are oered through Wilmington Trust Corporation’s international aliates. Loans, credit cards, retail and business deposits, and other business and personal banking services and products are oered by M&T Bank, member FDIC. ©2019 Wilmington Trust Corporation and its aliates. All rights reserved. 22104 190528 vF 22104_ GCM19 IJ Global Ad Q3_150528_v1.indd 1 5/29/2019 3:16:15 PM Contents 16 Cover story Monster hunting Major battery storage projects in Asia may still seem mythical to some but many have taken on the quest. By David Doré. 9 Who’s afraid of the CLO? Not all nancial instruments with three-letter acronyms are scary and CLOs for infrastructure debt are making a comeback. By Jon Whiteaker. 20 Defining the transition The number of energy transition funds is increasing and their investment targets are varied and numerous. By Viola Caon. 23 Changing market dynamics Developers in Brazil are turning to new revenue and nancing sources for the latest wave of renewable energy projects. By Juliana Ennes. ijglobal.com 1 Summer 2019 Contents 3 From the editor North America Briefings 42 Ottawa’s ESAP P3, Canada This project featured a rst in the Canadian PPP 4 Funds market 5 M&A 43 Stamp of approval 6 Capital Markets Presidential endorsement could see some major oil & 7 People gas projects get back on track 8 Policy & Regulations Europe Latin America 46 Vías Chile bonds 32 Talasol solar farm, Spain This renancing may prove a pathnder in the This zero-subsidy project required an innovative Chilean capital markets nancing solution 47 Ecuadorian PPPs 33 London calling The country is working hard to attract private The LSE remains an attractive destination for investment renewable energy funds 48 LNG-to-power and GNA I 35 Rookery South ERF, UK A look at Brazil’s power market reveals a rise in Financial close was a long time coming for this LNG-to-power projects energy-from-waste project Middle East & Africa Asia Pacific 51 Ravenhall Prison PPP re, Australia 38 A place in the sun This US private placement achieved a record tenor DFIs and foreign governments continue to support for an Australian PPP African renewables 52 Bright new idea 39 Sitra renery expansion, Bahrain Thailand oats a brand new energy strategy Sponsor BAPCO enlisted ECAs and regional banks to bring this project across the line Editorial Director Reporter, Energy Senior Marketing Manager Divisional CEO Angus Leslie Melville Elliot Hayes Andrew Rolland Jeffrey Davies +44 20 7779 8034 +44 02 7779 8404 +44 20 7779 8364 [email protected] [email protected] [email protected] Editor Reporter, Funds and M&A Data Manager Jon Whiteaker Arran Brown Nikola Yankulov +44 20 7779 8554 +44 20 7779 8441 +359 2 492 5750 [email protected] [email protected] [email protected] Assistant Editor Reporter, MEA Data Analysts: Eleonor Lundblad James Hebert Sophia Radeva, Lyudmila Zlateva, IJGlobal +44 20 7779 8040 +44 20 7779 8181 Iliyan Videnov, Yavor Guerdjikov, Euromoney Institutional Investor PLC [email protected] [email protected] Miroslav Hadzhiyski, Valentin Mihaylove 8 Bouverie Street Funds Editor Reporter, Asia Pacific Business Development Manager, EMEA London, UK EC4Y 8AX Viola Caon David Doré Doug Roberts +44 20 7779 8870 +44 20 7779 8324 +852 2912 8052 +44 207 779 8546 © Euromoney Institutional Investor PLC [email protected] [email protected] [email protected] 2019 ISSN 2055-4842 Americas Editor Reporter, Europe Business Development Manager, Ila Patel Eliza Punshi Americas +44 02 7779 8629 +44 20 7779 8648 Alexander Siegel Directors [email protected] [email protected] +1 212 224 3465 David Pritchard (Chairman), Andrew [email protected] Rashbass (CEO), Wendy Pallot (CFO), Asia Pacific Editor Reporter, Energy M&A Sir Patrick Sergeant, Andrew Ballingal, Senior Business Development Manager Alexandra Dockreay Sophie Mellor Tristan Hillgarth, Imogen Joss, Tim Collier, Tim Willmott +61 405 441 990 +44 20 7779 8205 Kevin Beatty, Lorna Tilbian, Jan Babiak [email protected] [email protected] +44 20 7779 7216 [email protected] Senior Reporter, Americas Juliana Ennes Head of Subscription Sales +1 212 224 3430 Nicholas Davies [email protected] +44 20 7779 8284 [email protected] Senior Reporter, Asia Pacific Mia Tahara-Stubbs Production Manager +65 8117 8240 Steve Ashenden [email protected] ijglobal.com 2 Summer 2019 FROM THE EDITOR While uid asset denitions can be a source of annoyance, they are a sign of a market attracting new types of investors. Mere categorisation and cheese-fired power “What’s in a name?” Juliet asks. Given the star-crossed lovers favoured label. Now we have the core-plus-plus category being sticky end, it seems the answer is – quite a lot, actually. used for high yielding xed income assets. Naming conventions and categorisation are intended While you could interpret this segmentation as simply to bring clarity and understanding, but those working in an opportunity for managers to justify higher fees, it is a good infrastructure nance could be forgiven for a growing sense of example of the ‘mere categorisation effect’. confusion over what exactly it is they do for a living. This theory says that the spread of options has an effect Infrastructure as an asset class continues to expand to the on the choosers’ satisfaction. In the example of a supermarket, a far reaches of credibility and terms like ‘green’ and ‘sustainable’ greater number of bread options on the shelf provides a shopper are bandied about with abandon. with a feeling of self-determination and a greater satisfaction with Then Iona Capital announces plans to build a biogas plant their purchase. in Yorkshire that uses the whey from Wensleydale cheese as a If you want to attract new investors to an asset class, best feedstock, and it is enough to make you think all rules no longer to provide a variety of investment options to give them a greater apply and we are living in a world where anything goes. sense of agency and condence they are picking a product best But as always, people should try to supress a natural fear suited to their objectives. of the new. Our technological environment is evolving fast and With the infrastructure funding gap still yawning, creating new opportunities. particularly in emerging markets, nding new ways to match Infrastructure has always been a slippery term. A lawyer investors to assets is a worthwhile cause. remarked to me recently that as far as he is concerned, “infrastructure More justied perhaps is annoyance with newer terms is anything that an infrastructure fund is willing to invest in”. connected to combating climate change that are very hard to pin Few would be quite as cynical but it is certainly true that down. Anyone who has looked closely at the investment criteria assets that would not have comfortably t the denition 10 years for green bonds know that ‘green’ is a broad church encompassing ago are happily incorporated into the universe now. Data centres many denominations. and crematoria spring to mind. The rightly ridiculed Repsol ‘green’ bond, which will fund Infrastructure funds are probably not the ones to be more efcient upstream oil development, is an obvious example setting hard rules because they need to keep denitions broad but a lack of clear guidelines is a problem for the whole of this and their options open. The choice between denition purity and growing market. successfully deploying capital is an easy one. ‘Energy transition’ and ‘sustainable’ can be similarly vague Most would say infrastructure assets still need to be essential terms, and while corporates and investors are attracted to these facilities or structures that have a monopoly or quasi-monopoly, investment opportunities to boost their ESG credentials, they are operate in a regulated environment, and have predictable long-term likely to become more discerning as shoppers.