On the back of its milestone agreement with Superannuation fund Hesta, ReNu Energy Ltd (ASX:RNE) will be hosting an update webinar including a Q&A session on Tuesday 27 June 2023 at 12pm AEST.
ReNu Energy CEO Greg Watson will join Proactive’s John Phillips to discuss the latest developments.
Register for the webinar in advance here.
“Following HESTA’s recent signing of the platform agreement for co-investment in selected hydrogen projects, I look forward to providing an update on those projects together with executive chairman Boyd White and executive director Geoffrey Drucker, who is also managing director of Countrywide (LSE:CWD) Hydrogen,” Watson said.
Hesta jumps on the hydrogen bandwagon
ReNu Energy and its wholly owned subsidiary, Countrywide (LSE:CWD) Hydrogen Pty Ltd (together the RNE Group) have signed a Platform Agreement with H.E.S.T. Australia Ltd as trustee for HESTA (HESTA), setting out the framework for potential co-investment in Green Hydrogen Projects developed by RNE Group.
This is a big deal for ReNu as HESTA is the largest superannuation fund dedicated to Australia’s health and community services sector. HESTA has more than 1 million members and manages over $72 billion in assets invested around the world.
The platform agreement provides for the RNE Group identifying, developing and presenting Green Hydrogen Projects to HESTA in accordance with agreed development plans and milestones, for HESTA to decide whether to co-invest.
Investment decisions will be made on a project-by-project basis.
“The signing of the platform agreement follows a period of due diligence by HESTA and transaction design work by both parties on how to jointly progress the green hydrogen projects through asset vehicles,” Watson said.
“The platform agreement contemplates a series of other agreements covering the development, operation and governance of the green hydrogen projects if acquired by the asset vehicles. Pro forma versions of these agreements have been prepared. We look forward to continuing to work closely with HESTA and our aim is for our Tasmanian Green Hydrogen Projects to be presented to HESTA for potential co-investment during 2023.”
If ReNu and Hesta agree to move forward with a green hydrogen project, and jointly invest, the platform agreement sets out the process and framework for the co-investment, development and funding of such projects, including:
- the establishment of a project specific trust owned on a 50/50% basis, unless agreed otherwise (Asset Vehicle) to jointly acquire the green hydrogen project from the RNE Group;
- the RNE Group and HESTA jointly investing in the asset vehicle (with the acquisition of the green hydrogen project occurring pursuant to an asset sale agreement and an investors agreement governing the relationship of the parties with respect to the asset vehicle);
- the acquisition price payable to the RNE Group for each green hydrogen project will be the aggregate development costs incurred and paid by the RNE Group in respect of the project up to the time it is acquired by the asset vehicle, which will be jointly funded by HESTA and the RNE Group;
- the RNE Group being entitled to a development fee paid by the asset vehicle, in addition to the acquisition price, for development activities provided prior to the acquisition of the green hydrogen project. The fee will be calculated based on a percentage of the aggregate development costs incurred and paid by the RNE Group in respect of the relevant green hydrogen project and reflect the status and progress of the project at the time it is acquired by the asset vehicle;
- the RNE Group being responsible for securing debt (where the parties elect to pursue project finance) and grant funding for the green hydrogen projects;
- the RNE Group being responsible for development, construction, day-to-day operations and management of the green hydrogen project and each asset vehicle pursuant to project specific asset management agreements and vehicle management agreements;
- the RNE Group’s activities in developing and operating the green hydrogen project to be consistent with HESTA’s ESG policies, including HESTA’s Responsible Investment Policy.
It contains exclusivity arrangements, whereby the RNE Group must provide HESTA with a first right of refusal over all Green Hydrogen Project opportunities and HESTA must not invest in any hydrogen opportunity in the next 18 months, which is in competition with the RNE Group's pipeline of Tasmanian projects.
If HESTA decides not to progress a green hydrogen project which is proposed by the RNE Group, the RNE Group is permitted to independently pursue the opportunity outside the platform agreement.
Countrywide (LSE:CWD) managing director and ReNu Energy executive director Geoffrey Drucker said: “We have a strong portfolio of green hydrogen opportunities we are proud to potentially progress with HESTA. Our Tasmanian domestic supply projects are on track for final investment decision this year.
“Our goal in Tasmania is to create a state-wide ecosystem for the production, distribution and use of green hydrogen and then replicate the model on the mainland. Our project partners are critical to our success. We can think of no better potential co-investment partner than HESTA who we originally singled out as an ideal and environmentally responsible partner.”
Hesta is also looking forward top progressing the agreement with chief investment officer Sonya Sawtell-Rickson saying, “HESTA has a long-term focus on investing in opportunities arising from the transition to a lower carbon future. We’re looking for opportunities to invest in the development of innovative technologies and businesses at the forefront of decarbonisation. That’s why we’re excited to further deepen our relationship with ReNu Energy through this new framework for potential co-investment opportunities.
“By using our scale and expertise, we aim to support the development of a pipeline of potential projects that can help deliver strong long-term investment returns for members while accelerating the transition to a more sustainable future. In doing so, we’re also supporting an emerging sector that we believe is poised for significant future growth.”
To find out more about the agreement, join the Proactive webinar on Tuesday at midday. To register for the event in advance go to https://event.webinarjam.com/register/273/9pyowa3m