Pacific Energy and QIC have successfully completed a $2 billion refinancing and equity raise, securing approximately $1 billion of growth capital to support the company’s continued expansion.
Pacific Energy has upsized its debt facility by $400 million, bringing its total debt capacity to $1.6 billion. Seven new lenders, including Société Générale, ANZ, Export Finance Australia, DNB Bank, China Construction Bank, Bank of Communications, and DBS, joined the existing syndicate, Westpac Banking Corporation, National Australia Bank, Industrial and Commercial Bank of China, Canadian Imperial Bank of Commerce, Sumitomo Mitsui Banking Corporation, Mizuho, Oversea-Chinese Banking Corporation and Bank of China, to form a 15-bank strong lending group.
The company said the refinancing was achieved on more competitive terms, including a reduced funding cost and extended debt maturities with diversified tenors of five, seven and ten years. These enhancements are expected to provide Pacific Energy with long-term financial flexibility and reduce refinancing risk.
Notably, $550M of the syndicated facilities have been allocated to green loan tranches, reinforcing the company’s commitment to decarbonisation and sustainable investment initiatives.
To further enhance its lending diversity, Pacific Energy will also launch an Asian Term Loan (ATL) to support its long-term capital strategy.
The successful refinancing is complemented with continued support from QIC and its institutional clients, culminating in a successful equity raise of $370 million.
The new equity commitments from investors across Australia, Asia and North America take the total amount of capital raised over the past 18 months to $500 million.
The new debt facility and equity raise provide Pacific Energy with approximately $1 billion of growth capital, positioning the company for future expansion.
With a contracted capacity of 946MW across 48 sites, the platform will continue to deliver on strong customer demand and a deep pipeline of development projects, including several recently executed Power Purchase Agreements.
Pacific Energy CEO, Jamie Cullen, said the successful upsizing of the company’s debt facilities and equity raise mark a significant milestone in supporting its strategic growth ambitions, including Pacific Energy’s continuing east coast expansion.
“This boost to our growth capital puts us in a strong position to advance our robust pipeline of renewable energy projects and take full advantage of the increasing opportunities in Australia’s transition to a low-carbon economy,” he said.
“We’re in a leading position to deliver long-term value for our customers, and at the same time, move the dial in a meaningful way towards a more sustainable future.”
Pacific Energy Chief Financial Officer, Todd Perkins, said, “This syndication drew strong interest from a diverse group of lenders, and we’re pleased to see the firm backing from both our existing lenders and seven new banks of Pacific Energy’s growth strategy.”
Mr Perkins said the significant lender demand and improved pricing reflects strong market confidence in the company’s business model and the strength of its portfolio.
“These transactions enhance our financial strength and flexibility, as well as provide a lower cost of capital to invest in sustainable energy solutions for our clients’ decarbonisation activities,” he said.
“We thank our debt and legal advisers Gresham and Allens respectively, for the valuable support provided throughout the process.”
QIC Head of Global Infrastructure, Ross Israel, said the fundraising momentum behind Pacific Energy represented a distinct opportunity to participate in Australia’s ongoing energy transition.
“Having invested in the energy transition thematic for over a decade, QIC has a deep understanding of the structural shifts reshaping Australia’s energy value chain, and we continue to see compelling and differentiated opportunities to deploy capital at scale,” he said.
“That conviction has once again been endorsed by new and existing capital partners supporting us to grow Pacific Energy. In doing so, they have recognised the tailwinds driving customer demand for the company’s specialised and differentiated capabilities.”
QIC Senior Principal and Pacific Energy asset manager and board member, Matthew Zwi, said the platform has evolved significantly since QIC’s acquisition in 2019.
“In that time, Pacific Energy has invested heavily in its capabilities through a series of value-chain acquisitions, creating a highly specialised, vertically integrated remote energy platform with full in-house capability to design, construct, commission and operate hybrid renewable power projects.
“The combination of these specialised capabilities and significant levels of prevailing demand for renewable and hybrid solutions in Australia’s remote energy sector have driven material growth in Pacific Energy’s portfolio,” he said.
“As the business has grown, it has also matured as an infrastructure investment through its increased portfolio scale and diversification and long tenor availability-based offtakes with inflation protection.”
“With this growth capital raise completed and the business competitively refinanced, Pacific Energy is well positioned to capitalise on customer demand and deliver its growth pipeline, which includes a range of renewable and hybrid projects in Western Australia as well as on the East Coast.”
