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GE is cashing in on Australia’s new renewables law

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GE is getting back to its industrial roots, but not just at home.Photograph by Mark Daffey — Getty Images/Lonely Planet Image

General Electric Co (GE) said it will help fund a $348 million Australian windfarm, the country’s third largest, after political leaders ended a deadlock over state subsidies that had stalled the $13 billion industry for over a year.

GE, Swiss private equity firm Partners Group Holding AG, Canadian pension fund OPTrust and UK-based Renewable Energy Systems Ltd said they will fund the 240-megawatt Ararat windfarm, three days after the government passed a law securing future subsidies for renewable energy.

Windfarms are Australia’s No. 2 renewable energy source, behind hydropower but ahead of solar, providing a quarter of the country’s clean energy and 4% of its total energy demand. But investment in the sector froze after the conservative government said last year it wanted to cut the country’s Renewable Energy Target (RET).

Renewables are one of the key beneficiaries of GE’s strategy of ditching its finance business and plowing the money into its traditional core industrial businesses.

The company said in April it would sell some $200 billion in finance assets in order to escape burdensome regulation that has depressed its profitability. One of the first sales in that process will be its health-care finance business, which may fetch over $10 billion. Bloomberg reported late Thursday that the business has attracted bids from Capital One Financial Corp. (COF) and hedge fund firm Apollo Global Management (APO), as well as Ares Management LP (ARES) and Ventas Inc. (VTR), according to Bloomberg.