HMC Capital has entered a strategic partnership with KKR, securing an investment of up to $603 million in HMC’s Energy Transition Platform. This significant capital injection will bolster HMC’s existing 652MW of operational assets, as well as its extensive 5.7GW battery storage and wind development pipeline. KKR’s investment, channelled through its Global Climate Transition strategy, establishes the firm as a minority equity partner in the platform.
This partnership enables HMC to expedite the development of new Battery Energy Storage System (BESS) and wind projects. These projects are critical for enhancing the reliability of Australia’s energy grid. HMC Capital specialises in investment management, offering a range of alternative investment solutions including real estate, private equity, and infrastructure. The company aims to deliver attractive risk-adjusted returns for its investors.
Following the investment, HMC’s invested capital in the platform is expected to decrease to approximately $200 million. The company anticipates equity returns exceeding its 20 per cent Return on Equity (ROE) target. The proceeds from the transaction will be strategically allocated to repay mezzanine and corporate debt, strengthening HMC’s financial position.
The agreement includes an upfront payment of $355 million, with a further commitment of $248 million. HMC retains the flexibility to introduce additional third-party capital into the platform in the future. Furthermore, HMC will receive annual corporate services fees of $5 million, which reinforces shareholder value and supports the continued advancement of its energy transition strategy.
