ReNu soars 140% on green hydrogen investment term sheet with Australian superfund HESTA

Australian superfund HESTA is seeking to invest in ReNu Energy’s (ASX:RNE) green hydrogen projects throughout Australia to the tune of up to $100m; sending ReNu’s share price up 140% to 9.6c. 

Both players have signed a term sheet, and investors are clearly bullish on the superfund’s proposed decision to invest. 

While it is not a binding term sheet and HESTA is yet to move ahead, the move does provide something else for hydrogen play investors: a signal that hydrogen sector momentous retains its legs. 

HESTA is the largest dedicated super provider to Australian health and community services workers. Over 80% of its members are women and it manages some $68bn in assets globally, ReNu notes. 

Green hydrogen, as a reminder, is that produced with electricity sourced from renewables.

The non-binding term sheet lays out the following: 

• HESTA’s willingness to invest up to $100m, should it proceed 

• ReNu to be responsible for delivery of green h2 projects 

• ReNu will be “entitled to a fee,” payable by HESTA

• ReNu to handle financing outside of HESTA 

• HESTA awarded first right of refusal to invest in existing, new projects

Binding offtake agreements the new agenda 

“We are excited to have HESTA on board as an institutional investor in our green hydrogen projects,” ReNu CEO Greg Watson said. 

“Our task now is to advance to definitive agreements as soon as possible and progress commercial discussions with our project partners for green hydrogen offtake.”

HESTA’s investment chief outlined the fund’s ESG focus in moving ahead with its decision today. 

“Investments like this will help create jobs and support communities, while delivering attractive risk adjusted returns for our members,” Sonya Satwell-Rickson said. 

“This investment will also serve our members’ best financial interests over the long-term by contributing to an equitable, orderly and timely transition to net zero emissions by 2050 in order to minimise the systemic risks of climate change.”

Worth noting is that HESTA have chosen to sign a non-binding term sheet with ReNu in the first week of COP27. 

Year of making friends 

This is not the first interested party of note ReNu has saddled up with through this year. 

German multinational WIRCON Group took an interest in ReNu’s operations earlier this year, and Tasmanian energy utility Tas Gas even signed on as a retailer for ReNu’s green h2 down the line. 

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Disclaimer: Market Index helps small-cap ASX listed companies connect with Australian investors through clear and concise articles on key developments. ReNu was a client at the time of publishing. All coverage contains factual information only and should not be interpreted as an opinion or financial advice.