Partners Group will invest more than $200 million to develop solar power plants across Taiwan over the next three years, providing the country's power grid with up to 550 megawatts of additional renewable energy capacity.
In a telephone interview, Andrew Kwok, a Singapore-based senior vice president, said the Taiwanese government's strong support for the expansion of the country's solar capacity is providing a tailwind now for greenfield investment opportunities there.
That $200 million of investments is on behalf of clients, including a minority co-investment by Cathay Life Insurance.
While declining to say how much debt the platform could take on, Mr. Kwok noted that roughly 70% of the costs of building solar plants in the Asia-Pacific region are typically financed by debt.
Institutional investors have long favored investments in operating, or “brownfield,” infrastructure, to avoid the risks of greenfield construction delays and uncertainties in hammering out the power purchasing agreements that ultimately determine an infrastructure investment's returns.
In the same telephone interview, Jennifer Blinch, a Partners Group spokeswoman, said with strong demand in recent years for core, operating infrastructure assets boosting prices and squeezing investment yields, Partners Group has focused on renewable greenfield infrastructure projects in Asia as offering investors relatively attractive returns.
Mr. Kwok said the government's strong push this year to expand renewables is serving to considerably lower those risks in Taiwan, while sharply expanding the opportunities.
Taiwan's general election in January replaced a government already supportive of expanding renewables with an even more supportive one, noted Mr. Kwok — effectively boosting the country's annual target for adding capacity from between 500 megawatts and 750 megawatts to roughly 2,000 megawatts, en route to a 2025 target of 20,000 megawatts.
The previous government had targeted renewable capacity of 6,200 megawatts by 2025.
Meanwhile, the country's state-owned utility, Taiwan Power Co., stands ready to conclude a 20-year power purchasing agreement, on terms that should provide attractive returns for Partners Group's investors, said Mr. Kwok. He declined to provide details.
The backdrop to the country's enthusiasm for renewables is a previous decision to phase out nuclear power over the next seven years or so, coming on the heels of Japan's nuclear disaster from the 2011 tsunami.
