The venture arm of the Ingka Group, which owns the majority of IKEA stores globally, has acquired a 15% stake in the 765 MW Golden Plains wind farm in Victoria, from developer TagEnergy. The move marks Ingka Investments’ first significant investment into utility-scale renewable energy projects in Australia, with the group stating that it seeks to tap similar opportunities in India, China, Japan, and South Korea. Ingka has bought into the initial phase of the wind farm, which is the first fully merchant wind farm in Australia to be financed by commercial lenders. The project reached financial close in Nov '22, securing funds from institutions including Mizuho Bank, Denmark’s EKF, Westpac, and Australian Government-owned Clean Energy Finance (CEFC). TagEnergy has also expressed willingness to bring Ingka on as a partner in the second phase of the project, which comprises 576 MW of generation capacity and a 300 MW battery. The second phase is expected to reach a financial close in early 2024.
According to Enerdatics’ research, the advent of innovative financial structures and products that are emerging for renewables investments has reduced the necessity of a PPA, with several projects now operating on a fully-merchant basis. Analysts have highlighted that traditional lending institutions have synthesized customized solutions that factor in the volatility in power prices arising from a merchant-based marketing mechanism, gradually disrupting the long-standing preference for the stability of PPAs.
The Ingka Group has committed to invest €4bn in renewable energy projects during the current decade. As of 2021, ~76% of the company’s global operations run on clean power, and Ingka is on track to achieve its target of powering 100% of its operations with renewable electricity by 2025. The firm has been making large-scale investments across Europe, with its most recent move being the acquisition of a 49% stake in 9 GW of offshore wind projects in Sweden from OX2. The firm also invested €190mn in an onshore wind and solar portfolio in Poland in May '22 and bought 440 MW of solar PV parks in Germany and Spain from ENERPARC in Apr’22. As per Enerdatics data, Ingka’s combined renewables portfolio stands at ~2.4 GW.
The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.
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