Infratil upbeat about US renewable energy despite Trump uncertainty
Infratil says there will be headwinds 'but the ship is unlikely to sink.'
Infrastructure investor Infratil is still upbeat about its investment in US renewable energy development company Longroad Energy Holdings despite President Donald Trump's election promises to promote coal.
While Infratil said the company's progress has been overshadowed by the potential impact of Mr Trump's promises, "the president's comments about each of coal, gas and renewables are inconsistent, making outcomes hard to anticipate."
In a market update to the New Zealand stock exchange, it noted that ,while there is no way of knowing how federal and state policies, the rising cost of coal mining, the falling cost of gas, and improving renewable plant economics will play out, there are also political, societal and commercial factors that make it extremely unlikely that the US will suddenly stop building renewable generation.
"There will be headwinds but the ship is unlikely to sink," it said.
The US situation is "hardly ideal" for Longroad's plans to develop but Infratil said its business model is suited to dealing with uncertainty.
Infratil and the NZ Superannuation Fund teamed up with a local management team to invest in Longroad in October last year. At the time it said the investment gives the Kiwi team exposure to one of the largest and fastest-growing renewable markets in the world, with an experienced US management team previously involved in First Wind, which Infratil said was one of the most successful independent renewable energy development teams in the US over the past decade.
It said today that shareholders have jointly agreed to provide initial funding of $US100 million and Infratil's share is $65 million. Since October, Longroad has announced the purchase of a portfolio of early stage solar development projects across several states, as well as the purchase of wind turbines which will be deployed as developments become available.
Infratil shares last traded up 0.4% at $2.875.
(BusinessDesk)
Rebecca Howard
Wed, 08 Feb 2017
Wed, 08 Feb 2017
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Infratil upbeat about US renewable energy despite Trump uncertainty
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