Whitehelm Capital

Case Studies

Oaklands Hill

Investment Description and History

The Oaklands Hill Wind Farm is a 67 MW capacity wind farm that is located in Glenthompson, Victoria, Australia. Oaklands Hill consists of 32 x 2.1MW Suzlon S88 V3A wind turbines and is connected to Powercor’s distribution network.

The asset is underpinned by a whole of life (25 year) take or pay off-take agreement with AGL Hydro. AGL Hydro provides O&M services to Oaklands Hill under a 25 year fixed price Asset Management Deed (AMD).  Under the off-take agreement, AGL Hydro take all electricity and renewable certificate output (and pricing risk). AGL Energy (BBB rated), one of the leading energy companies in Australia provides a parent company guarantee for AGL Hydro’s obligations.

Whitehelm (through the Challenger Life Company) acquired 100% of Oaklands Hill in June 2011 with the wind farm commencing operations in December 2011. As part of the acquisition, approximately $200m of external debt and interest rate hedges through three separate credit counterparties under a tight transaction timeline.

Investment Merits

Oaklands Hill is a fully contracted wind farm thus providing significant protection to debt and equity providers. The asset is subject to a 25 year offtake agreement with AGL.  Under this agreement, AGL takes all electricity and price risks. The investment is also largely protected from wind risk with 100% of revenues being fixed for the first 5 years followed by a cap and collar arrangement for the last 20 years.  O&M is fully contracted with AGL at a fixed price over the 25 year life of the asset.

Whitehelm Value-Add

Whitehelm Capital staff negotiated the key commercial terms and legal documents of the transaction with AGL as well as raising approximately $200m of debt capital with three separate credit counterparties.  Since acquisition, Whitehelm has undertaken a key role in the overall monitoring of the company including both its ongoing operations and capital structure requirements.