State-owned Beijing Energy explores partnerships to get approval for Australia solar farm deal
SYDNEY, July 24 (Reuters) - A Beijing-based firm is open to teaming up with new investors to purchase several solar farms in Australia, a company official said, as it looks to satisfy regulatory concerns over the ownership of key energy assets by a Chinese state-owned company.
Beijing Energy International Holding (BJEI, the investment arm of the Chinese capital city, announced in December that it had signed an up to A$813 million ($535.44 million) agreement to buy five solar farms across Australia from Lightsource BP, a joint venture set to soon be 100% owned by British oil and gas giant BP.
That would equate to more than 80% of the total Chinese investment in Australia last year, based on data from KPMG and the University of Sydney.
But the company has been awaiting approval from Australia's Foreign Investment Review Board (FIRB) for months, the final step for the deal to be completed.
Warwick Smith, a prominent Australian businessman who chairs BJEI's local subsidiary, said the company had met all of FIRB's regulatory requirements.
"My sense of it is that it's a state-owned enterprise but it has intentions to reduce its equity levels, so that's a big plus in its favour," he told Reuters. "It likes to see other investors involved."
He declined to give any details of the investors the company was likely to choose as partners.
The Chinese company entered Australia in 2014 when it purchased a wind farm in New South Wales state.
With the acquisition of the solar farms from Lightsource BP, it would be the largest owner of utility-scale solar projects in Australia, outpacing France's Neoen (NEOEN.PA), and Spain's FRV, according to consultancy Rystad Energy.
Foreign investments into Australia in the renewables sector have come under heavy scrutiny as Canberra deems the electricity sector to involve critical infrastructure essential to maintaining the country's national security.
BJEI also has plans to buy an Australian electricity and gas retailer CovaU, owned by TPC Consolidated Limited (TPC.AX). That is also awaiting a decision from FIRB, with a revised expiry date of July 31 just a week away.
The Australian government has already blocked some Chinese investments in the rare earths and lithium sectors over the last year.
Bilateral ties are warming, as evidenced by Chinese Premier Li Qiang's visit to Australia in June, but analysts say Chinese investments in the country are unlikely to return to the recent peak of about $11.5 billion in 2016.
"China would have to consider more carefully whether the investment is long-term sustainable and where it fits in the strategic context," said Hans Hendrischke, a professor at the University of Sydney.