First renewable energy investment for Ingka Investments in Australia

Ingka Investments, the investment arm of Ingka Group, the world’s largest IKEA retailer, has made its first renewable energy investment in Australia taking a 15 per cent stake in the AUD 2bn (EUR 1.3bn) stage one of TagEnergy’s Golden Plains Wind Farm near Geelong.

The move comes as Ingka Investments accelerates investments in renewable energy, and circularity to support Ingka Group’s climate-science based targets and contribute to the overall IKEA commitment to become climate positive by 2030*, while growing the business and a commitment to reach net-zero by 2050 at the latest.

The investment in the mega project is Ingka Investments’ first major investment in utility scale renewable energy in Australia and reflects its strategic priority to secure long term access to renewable energy in IKEA Retail countries in Asia.

The overall project has a total planned capacity of 1.3GW and consists of two stages. Once complete, Golden Plains Wind Farm will provide sustainable energy for more than 750,000 homes – the equivalent of every home in regional Victoria.

Stage one consists of 756MW (122 turbines) with an expected annual production of over 2,000 GWh/yr. Pro-rata to the ownership stake, Ingka Investments will be able to claim up to 15% of the project output of electricity and Renewable Energy Attributes and link it to the local Ingka Climate Footprint.

TagEnergy and the original developer Westwind are also preparing for construction of stage two (576MW/93 turbines) and a 300MW battery storage facility that will add flexibility and stability to the electricity grid. Entering a critical decade for climate action, Ingka Group, through its investment arm Ingka Investments has committed to expanding its investments in renewable energy to EUR 6.5 billion as the next step towards 100% renewable energy across the value chain. Since 2009, Ingka Investments has invested over EUR 3 billion into renewable energy projects in wind and solar power, enabling the group to generate more renewable energy than it consumes across its global operations. The aim is to produce 15TWh and support the group’s climate footprint reduction. It is now looking to expand its renewable energy portfolio in the Asia-Pacific region where Ingka Group has retail operations in Australia, China, India, Japan and South Korea.

Peter van der Poel, managing director of Ingka Investments, says: “Sustainability investments are a growth sector, where doing good business and being a good business comes together, and therefore are also a core strategic priority for Ingka Group. It is about making the necessary investments to meet sustainability goals and support the IKEA transition to become climate positive and transition to a circular business model, through offering affordable solutions enabling people to live within the planetary boundaries. The investment also increases our ability to support value chain partners with renewable energy.”

Mirja Viinanen, CEO and CSO of IKEA Australia, says, “Following the commitment of Ingka Group to invest € 6.5bn in Renewable Energy, the company is increasing efforts to invest in renewable energy production in countries where the output can be used to help reduce the footprint of Ingka Group, its value chain partners or customers within the Ingka Climate Footprint. Understandably Australia has been identified as a location with rich potential for renewable investments and this agreement is the first for Ingka Investments in this country.”

Andrew Riggs, TagEnergy Managing Partner Australia, said attracting principled investment from a like-minded partner reflected the effectiveness of the company’s innovative business model and its commitment to helping the world reach net zero emissions sooner.

“We welcome Ingka Investments as a partner in its first renewable energy investment in Australia. Golden Plains 1 is a globally significant project that will accelerate the transition to net zero carbon emissions,” Mr Riggs said.

“We are proud to join forces with an innovative, global company that shares our belief in sustainable investments with purpose,” he said.

Closing of the transaction is subject to approval by the Foreign Investment Review Board.

Stage one of the project reached financial close in November 2022. All construction contracts are underway, and the facility is expected to be fully operating by the end of 2025.