IFM hit by USD 600m in Pacific Hydro write-downs - report

Oct 6, 2014 - Australian fund manager IFM Investors has taken AUD 685 million (USD 597m/EUR 476m) of write-downs on its renewable energy unit Pacific Hydro Ltd, due in part to the revision of the country’s renewable energy target (RET) scheme and lower demand for power.

The Australian Financial Review on Monday cited IFM Investors CEO Brett Himbury as saying that the Pacific Hydro write-downs are expected to bring down the value of IFM’s Australian Infrastructure Fund by about 5% for the September quarter. According to Himbury, the RET revision has impacted investor confidence and created uncertainty around current laws.

The executive pointed out that if the government keeps the current legislation, a positive pricing outcome will likely follow.

Pacific Hydro develops hydro, wind, solar and geothermal power projects in Australia, Brazil and Chile. The company has already put on hold AUD 550 million worth of projects in South Australia due to the RET revision. Among them is its 100-MW Keyneton wind park, calling for an investment of AUD 240 million.

In February the Australian government picked global warming skeptic Dick Warburton to review the country’s RET programme, which is the instrument driving green investment in the country. The review panel’s report came out in August, calling for the close of the RET scheme to new entrants with large-scale projects, among other measures threatening the sector’s future.

IFM Investors, which has AUD 50 billion under management, will hold an investor briefing on October 7 with a focus on Pacific Hydro. The fund manager will also make a review of Pacific Hydro’s operations by end-2014.

The global fund manager is owned by 30 super funds.

(AUD 1.0 = USD 0.871/EUR 0.695)

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