October 31, 2019 / 4:59 AM / 17 days ago

UPDATE 1-France's Engie looks to set up renewables fund in Australia

* Fund would aim to develop 2,000 MW of wind, solar

* Strong appetite from infrastructure, pension funds - CEO

* Mitsui looks to invest in fund (Adds Mitsui comment)

By Sonali Paul

MELBOURNE, Oct 31 (Reuters) - French energy company Engie plans to set up a renewable energy investment fund in Australia to speed up investment in wind and solar farms, its Australian head said on Thursday.

The plan is to find one or more partners to invest in a fund to develop 2,000 megawatts (MW) of wind and solar farms in the next 10 years, including the 165 MW of wind power Engie Australia has already installed and 800 to 1000 MW of wind and solar projects it has on the drawing board, Australia and New Zealand Chief Executive Augustin Honorat said.

“It’s a way to grow faster,” Honorat told Reuters in an interview.

He said there was strong appetite from foreign and local infrastructure and pension funds and the finance community for the planned fund, which he expected would take a few months to set up. He declined to put a size on the fund.

Engie, which shut its Hazelwood coal-fired power plant and sold its other coal-fired plant in Australia in 2017 as part of a global exit from coal, sees Australia as one of 20 growth markets globally for expanding in renewables.

While many power producers say Australia’s uncertain energy policy is deterring investment in new capacity to replace ageing coal-fired plants, which still generate more than 60% of the nation’s power, Honorat said Engie was focused on its customers’ desire for clean power.

“There’s a lot to do here because of that energy transition,” he said.

Engie on Thursday said it had signed a five-year deal to supply the Australian operations of L’Oreal SA with 100% renewable energy through a fixed-price power purchase agreement, and sees more opportunities for corporate power deals.

Engie has long partnered with Japan’s Mitsui & Co in the A$5 billion ($3.5 billion) of investments it has made in Australia, and Mitsui said it is also looking to step up its investment in renewables in Australia through the fund.

“We are in ongoing discussions with our partner Engie on the opportunity to invest further through the fund to accelerate Australia’s energy transition,” a Mitsui spokesman said in an emailed comment.

Australia’s top power producer, AGL Energy, set up a similar fund in 2016, the Powering Australian Renewables Fund (PARF), with Queensland Investment Corp, together investing A$1 billion in equity to develop 1,000 MW of renewable projects.

$1 = 1.4440 Australian dollars Reporting by Sonali Paul; editing by Richard Pullin

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