Through the Solarion Renewable Fund, we are offering investors the opportunity to use their capital to bring about change – to individuals, communities, businesses, the environment, and even the way we energy is generated.
Our vision is to be at the forefront of the transition towards renewable energy in the Asia-Pacific region, while delivering meaningful environmental benefits and making a difference to people and their local communities. To do this, we’re re-shaping the way energy is generated. No longer burdened by having to build large renewable projects covering hundreds of acres of prime land, we see an opportunity to create value through bespoke medium-scale solar projects that generate strong returns while helping local regions.
The core team behind the Solarion Renewable Fund are united by a set of core values and focused on using renewable projects to better the environment and communities. All of the medium-scale solar projects that are available through the Fund must meet a set of core investment criteria ensuring no sensitive land or native vegetation is impacted, local people and businesses are prioritised for work opportunities, and materials are recycled where possible. It’s a small change but combined it makes a big difference for people and for the environment.
At Solarion, we’re trying to create a better future and the Fund is our way of offering investors the ability to make a change by combining an investment for a financial return with a positive contribution to the environment and society.
Solarion Investment Pty Ltd ("we", "us" or "our") value the security and privacy of your personal information. This policy outlines our ongoing obligations to you in respect of how we manage your Personal Information.
We have adopted the Australian Privacy Principles (APPs) contained in the Privacy Act 1988 (Cth) (the Privacy Act). The APPs govern the way in which we collect, use, disclose, store, secure and dispose of your Personal Information.
A copy of the Australian Privacy Principles may be obtained from the website of The Office of the Australian Information Commissioner at www.aoic.gov.au
Personal Information is information or an opinion that identifies an individual. Examples of Personal Information we collect include: names, addresses, email addresses, phone and facsimile numbers.
This Personal Information is obtained in many ways including correspondence, by telephone and facsimile, by email, via our website www.solarion.co, from media and publications, from other publicly available sources, from cookies and from third parties. We don’t guarantee website links or policy of authorised third parties.
We collect your Personal Information for the primary purpose of providing our services to you, providing information to our clients and marketing. We may also use your Personal Information for secondary purposes closely related to the primary purpose, in circumstances where you would reasonably expect such use or disclosure. You may unsubscribe from our mailing/marketing lists at any time by contacting us in writing.
When we collect Personal Information we will, where appropriate and where possible, explain to you why we are collecting the information and how we plan to use it.
Sensitive information is defined in the Privacy Act to include information or opinion about such things as an individual's racial or ethnic origin, political opinions, membership of a political association, religious or philosophical beliefs, membership of a trade union or other professional body, criminal record or health information.
Sensitive information will be used by us only:
• For the primary purpose for which it was obtained
• For a secondary purpose that is directly related to the primary purpose
• With your consent; or where required or authorised by law.
Where reasonable and practicable to do so, we will collect your Personal Information only from you. However, in some circumstances we may be provided with information by third parties. In such a case we will take reasonable steps to ensure that you are made aware of the information provided to us by the third party.
Your Personal Information may be disclosed in a number of circumstances including the following:
• Third parties where you consent to the use or disclosure; and
• Where required or authorised by law.
Your Personal Information is stored in a manner that reasonably protects it from misuse and loss and from unauthorized access, modification or disclosure.
When your Personal Information is no longer needed for the purpose for which it was obtained, we will take reasonable steps to destroy or permanently de-identify your Personal Information. However, most of the Personal Information is or will be stored in client files which will be kept by us for a minimum of 7 years.
You may access the Personal Information we hold about you and to update and/or correct it, subject to certain exceptions. If you wish to access your Personal Information, please contact us in writing.
-weight:bold" lang="EN-AU">Solarion Investment Pty Ltd will not charge any fee for your access request, but may charge an administrative fee for providing a copy of your Personal Information.
In order to protect your Personal Information we may require identification from you before releasing the requested information.
It is important to us that your Personal Information is up to date. We will take reasonable steps to make sure that your Personal Information is accurate, complete and up-to-date. If you find that the information we have is not up to date or is inaccurate, please advise us as soon as practicable so we can update our records and ensure we can continue to provide quality services to you.
This Policy may change from time to time and is available on our website.
33 Warwick Street
Walkerville SA 5081
+61 466 631 776
Solarion Renewable Fund (Fund) is an unregistered managed investment scheme in the form of an Australian unit trust. The Fund is only available to investors that are wholesale clients as defined in s761G of the Corporations Act 2001 (Cth).
Solarion Investment Pty Ltd (Investment Manager) is the investment manager of the Fund. The Investment Manager is a corporate authorised representative (No. 001284401) of D H Flinders Pty Ltd (AFSL 353001). The Investment Manager's authority under its Corporate Authorised Representative Agreement with D H Flinders Pty Ltd is limited to general advice regarding the Fund only. Any other advice provided is not provided pursuant to this agreement. Vasco Custodians Pty Ltd (Trustee) is the trustee of the Fund.
This website contains information about the potential issue of interests in the Fund, but it is not intended to be used by any other persons in any other jurisdiction if and to the extent that to do so would be in breach of Australian laws, or the laws of any foreign jurisdiction.
This website contains general information only and is not intended to provide any person with financial advice. It does not take into account any person's (or class of persons) investment objectives, financial situation or particular needs, and should not be used as the basis for making an investment in the Fund. Neither the Investment Manager, D H Flinders Pty Ltd nor Trustee make any representation as to the accuracy, completeness, relevance or suitability of the information, conclusions, recommendations or opinions contained on this website (including, but not limited to any forecasts made). No liability is accepted by any of these entities or their respective directors, officers, employees, agents or advisors for any such information, conclusions, recommendations or opinions to the fullest extent possible under applicable laws.
This website may contain forward looking statements regarding our intent, belief or current expectations with respect to market conditions. Readers are cautioned not to place undue reliance on these forward-looking statements. The Investment Manager does not undertake any obligation to revise any forward-looking statements to reflect events and circumstances after the date of this publication.
Neither the Investment Manager, D H Flinders Pty Ltd nor Trustee guarantee the repayment of capital, the performance of any investment or the rate of return for the Fund. Past performance is not necessarily indicative of future performance.
Like any investment, there are risks associated with investing in the Fund. There are a number of risk factors that could affect the performance of the Fund and the repayment of Investor’s capital. Many risk factors fall outside of the Trustee’s and the Investment Manager’s control and cannot be completely mitigated.
The following is a non-exhaustive list of the main risks associated with investment in the Fund. Investors should consider and weigh them up carefully and make their own assessment as to whether they are comfortable with them.
General investment risk
The value of an investment may rise or fall, distributions may or may not be paid and an Investor’s capital may or may not be returned.
The Fund seeks to deliver returns to Investors.
The Fund is targeting returns which are higher than interest paid on basic deposit products. However, Investors should note that an investment in the Fund is not an investment in an ADI (such as a bank) regulated by APRA and an investment in the Fund carries more risk than an investment in a bank. As a general rule, higher potential returns have higher levels of uncertainty (high-risk) than investments with lower potential returns and low levels of uncertainty (low-risk).
The Target Returns offered under each Investment Option are not a forecast. The Fund may not be successful in meeting this objective and returns are not guaranteed.
None of the Trustee, the Investment Manager nor any other person or entity guarantees any income or return from an investment of the Fund.
Investment Manager risk
The Trustee and Investment Manager may elect to retire or may be replaced as the Trustee or Investment Manager of the Fund or the services of key personnel of the Trustee and Investment Manager may become unavailable for any reason.
There is always a risk that the Investment Manager may fail to identify and adequately manage the investment risks of the Fund and thus affect the ability to pay distributions or reduce the value of the Units.
Operational risks of the Trustee, the Investment Manager and the Administration Manager include the possibility of systems failure, regulatory requirements, documentation risk, fraud, legal risk and other unforeseen circumstances.
The Fund is relying on the ability of the Investment Manager to achieve its investment objectives. If the Investment Manager were not to continue in its role, the Fund may not be able to achieve these objectives.
The Trustee may from time to time face conflicts between its duties to the Fund as trustee and its duties to other funds which it manages or its own interests. The Trustee will manage any conflicts in accordance with its conflicts of interest policy, the Constitution, ASIC policies and the law.
The Investment Manager is not a related party of the Trustee. The contractual arrangements between the Trustee and the Investment Manager are negotiated at arm’s length between the parties. The Trustee may from time-to-time enter into transactions with related entities. The Administration Manager is a related party of the Trustee.
Investors also acknowledge that all investments made by the Fund will be in related parties of the Investment Manager and may not be on arms-length terms.
It is not the responsibility of the Trustee to assess the merits of this investment recommended by the Investment Manager, but rather to ensure that this investment is within the terms outlined in this IM and permissible under the Constitution. Accordingly, the Trustee does not guarantee that the Fund’s investments are otherwise made on arm’s length terms.
By investing in the Fund, Investors acknowledge that the Investment Manager is responsible for making investment decisions for the Fund and that they have made their own independent investigations to satisfy themselves of the benefit of becoming an Investor in the Fund.
The Fund will invest in the Solar Farm SPVs alongside financial, strategic or other co-investors (including the Investment Manager and one or more of its affiliates). There is a risk that co-investors may have economic or business interests or objectives that are inconsistent with those of the Fund or may be in a position to take actions contrary to the Fund’s investment objective. This risk is exacerbated because co-investors will hold voting shares in the Solar Farm SPVs whereas the Fund will hold non-voting shares.
Generally, the more diversified an investment portfolio, the lower the impact that an adverse event affecting one investment will have on the income or capital value of the portfolio. While the Fund intends to ultimately invest in multiple Solar Farm SPVs that will be geographically diversified, its sole investment is non-voting preference shares in SPVs operating in one sector.
Legal, regulatory and compliance risk
Changes in government legislation, regulation and policies generally could materially adversely affect the operating results of the Fund. Although unable to predict future policy changes, the Investment Manager intends to manage this risk by monitoring and reacting to any potential regulatory and policy changes.
The operation of a funds management business in Australia is subject to significant regulation by Australian government authorities including without limitation the Australian Securities and Investments Commission, the Australian Transactions Reporting and Analysis Centre, the Foreign Investment Review Board and the Australian Consumer and Competition Commission. There is a risk that the Fund may not comply at all times with its various obligations under government regulations and this may result in the loss of authorisations of the Australian Financial Services Licence held by the Trustee thereby preventing the continued operation of the Fund. The development and operation of solar farms in Australia is also subject to regulation. There is a risk the Solar Farm SPVs may not comply at all times with their obligations which may affect the operation of a Project and the returns generated for the Investment Option in which that Project sits.
The Fund is an illiquid investment.
This is the risk stemming from the lack of marketability of an investment that cannot be bought or sold quickly enough to prevent or minimise a loss or make a profit. There is a risk an Investor may not be able to exit its investment in an Investment Option at the end of the targeted 5-7 year Investment Term.
There is currently no secondary market for Units in the Fund and it is unlikely that any active secondary market will develop. There are substantial restrictions upon the transferability of Units under the Fund documents and applicable securities laws.
You should only consider an investment in this Fund if you are not likely to require access to your investment in the medium term.
Information not complete or accurate
The Trustee is not in a position to confirm the completeness, genuineness or accuracy of any information or data included in this IM. A significant amount of the material provided in this IM was supplied by third parties including the Investment Manager. This information has not been audited or independently reviewed.
Tax regulations can change and changes can be adverse. Investors should consider their own circumstances before investing.
The Fund has no operating history upon which Investors may base an evaluation of its likely performance. The success of the Fund’s investment activities will depend almost entirely on the Investment Manager’s ability to carry out the proposed investment strategy successfully. While the principals of the Investment Manager have previous experience making and managing investments of the type contemplated by the Fund, a number of the targeted investment types could be considered to require detailed market and industry knowledge, and there can be no assurance that the Fund’s investments will achieve the Target Return or will avoid a loss.
Fees and expenses
The Fund will incur fees and expenses regardless of whether it is successful. The Fund will pay investment management fees, Trustee fees and administration fees whether or not it receives its returns.
In addition, the Fund will also be required to pay investment management fees, Trustee fees and administration fees whether the funds raised are fully utilised or not. The Fund must therefore ensure that sufficient liquidity is maintained in order to meet these and other expenses.
The Trustee and the Investment Manager expect to incur significant costs and expenses in seeking to source, evaluate, structure, negotiate, close, monitor and exit an investment including, but not limited to, financial, legal, technical, regulatory, commercial advisers, engaged to assist the Trustee and the Investment Manager in seeking to source, evaluate, structure, negotiate, close, monitor and exit the investment. There can be no assurance that the Fund will be successful in being able to recover these fees and expenses from a successfully closed investment.
These amounts may be significant and could have an adverse impact on the return that Investors might otherwise realise.
The Fund’s investments will be domiciled in Australian dollars and therefore the weakening of a country’s currency relative to the Australian dollar will negatively affect the value of the Fund from the perspective of an international investor.
The Investment Manager does not have any material independent financial resources. If an action or claim is brought against the Investment Manager and such claim is not covered by the professional indemnity or directors’ and officers’ insurance policies arranged by or on behalf of the Investment Manager, the Fund cannot assure that the Investment Manager will have sufficient financial resources to cover any amounts payable under any such claim. The Fund is reserved to Wholesale Clients who are required to be aware of the risks involved in an investment such as the Fund and who accept that they will have recourse only to the Fund’s assets in existence at any given time.
Any number of unknown risks may arise as a result of the current COVID-19 pandemic which may adversely impact the Fund and returns to Investors.
It is important to note that not all risks can be foreseen. It is therefore not possible for the Investment Manager to protect the value of the Fund’s investment from all risks. Investors should ensure they obtain appropriate professional advice regarding the suitability of an investment in the Fund having regard to their individual circumstances, including investment objectives, their level of borrowings, their financial situation and individual needs.
Whilst the Investment Manager has taken steps to ensure that the information presented in this IM is correct, it is possible that due to factors such as the passage of time or the uncertainty in forecast details that the information contained in this IM may be inaccurate at the date of release of the IM or at a later time.
The Trustee has not sought to verify any statements contained in this IM about the investment opportunity described herein, the investment strategy employed by the Investment Manager, the Investment Manager’s business or the business of any other parties named in this IM.
Project development risk
Project development risk covers the risks associated with developing a project from the ground-up, including the outlay of significant capital in anticipation of future returns which may or may not be achieved.
The Fund will not be investing into any projects that are in the development phase.
Capital calls (beyond the initial commitment amount) will only be made once a project is fully permitted, constructed and operating.
Construction risk includes the risks associated with construction projects, such as dealing with contractors and unexpected costs overruns.
The Solarion SA U1 Solar Farm began operating in July 2019 and remains covered by the defect liability period in the Engineering, Procurement and Construction (EPC) contract until July 2021.
The Investment Manager will take a cautious approach to assessing the construction quality and performance of the SA U2 – U5 Solar Farms and other future projects.
The Investment Manager may appoint Solarion Renewables to construct the SA U2 – U5 Solar Farms under an EPC contract. An EPC contract outlines the roles and responsibilities of the EPC contractor during and after construction, and the warranty provided by the contractor during the defect liability period. The defect liability period is 24 months.
To minimise construction risk, the SA U2 – U5 Solar Farms and all future projects must be fully operating and have reached 'commercial operation' before a full capital call will be made. The quality of the construction and the performance of the solar farm will be verified by an independent technical due diligence report, and a legal due diligence report will confirm the status of the project and mitigate any risks. The EPC contractor may also provide the legal and technical due diligence reports provided they are independently produced from suitably qualified advisers. In both scenarios, the due diligence reports will be made available to potential Investors in the Investment Option.
Capital calls (beyond the Initial Commitment Amount) on a project will only be made when the Investment Committee agree through a majority vote that the due diligence is satisfactory, the project has reached ‘commercial operation’, and the acquisition of the project should proceed.
Equipment risk includes risks associated with the maintenance, support and lifecycle of critical equipment. Solar assets are long dated assets which generally have a design life of around 30 years and have manufacturer’s equipment performance warranties which guarantees the amount of electricity output over the long term, such as 25 years for solar panels. However, if equipment fails, then output could be temporarily reduced while a warranty claim is made and the equipment is repaired or replaced, which could impact the returns of the Solar Farm SPV and therefore the returns of the Fund.
Environmental risk includes any environmental factors, such as natural disasters, that may impact a project. Solar assets are subject to disasters, which can damage solar farms and temporarily reduce output. If this risk eventuates then it could impact the returns of the Solar Farm SPV and therefore the returns of the Fund.
Operational risk covers the uncertainties faced in the course of a business conducting its daily activities. The Projects may be operated by an independent O&M company or through a party related to the Investment Manager. The O&M activities will be underpinned by a detailed O&M contract with the Project SPV that lays out how each site will be operated, the timing and extent of the maintenance activities, and the performance guarantees. There is no guarantee the O&M company will meet the standards required of it under the O&M contract, which could affect the operation of a solar farm and impact the returns of the relevant Solar Farm SPV and therefore the returns of the Fund.
Electricity price risk
There are risks that the price of electricity may fluctuate and impact the returns of the Solar Farm SPV and therefore the return of the Fund.
The SA U1 Solar Farm has a 7.75 year CfD for 50% of the projected electricity output.
The Investment Manager has obtained forecast wholesale spot prices from ITK Services, a consultancy that provides wholesale price forecasts for the NEM, and average prices in South Australia are expected to increase in 2021. These higher spot prices will feed through to more attractive CfD prices so it is the intention of the Investment Manager to delay securing CfDsfor the SA U2 – U5 Solar Farms until they are closer to operating. The CfDs will be for at least 50% of the projected electricity output.
Large-scale Generation Certificates (LGCs) can be ‘bundled’ into a CfD and PPA, however offers provided by several electricity retailers to the Investment Manager under-value the LGCs and do not offer reasonable returns for Investors. In contrast, forecast spot LGC prices offer a premium in the short term and is the preferred trading strategy of the Investment Manager.
Beyond that, LGCs decline to a low value, although prominent energy consultants such as RepuTex and Energetics argue that there is a floor price for the LGCs set by the Australian Carbon Credit Units (ACCUs), saying “the concentration of market power amongst a handful of retailers and the increasing decarbonisation trend will result in LGCs retaining a market value, at least on par with ACCUs plus a retailer premium”. The ACCUs are trading at $16 in October 2020.
The LGCs will be managed and sold by Diamond Energy as they accumulate.
It is possible that Solarion Renewables may construct the medium-scale solar projects under an EPC contract, and then operate and maintain the solar farm under an O&M contract, and a dispute arises about warranties, performance, costs or other matters. In these cases, there may be a conflict of interest in resolving the dispute between Solarion Farm SPV and Solarion Renewables, both of whom are related to the Investment Manager.
Such disputes must be handled according to Solarion’s Conflict of Interest policy, which will be adopted by each Solar Farm SPV. This policy provides that any dispute of this nature will be handled and resolved exclusively by the Non-Executive Directors and independent members appointed to the Investment Committee of the Investment Manager.
The Non-Executive Directors and independent members may also appoint a suitably qualified advisor to represent and act in the interests of the Fund in the dispute.
No employees or directors with a connection to a Solarion related entity will be involved in negotiating, managing or resolving a dispute.