Federation Asset Management, backed by Ares Management, has signed an agreement to buy the 75% of Windlab that it did not own from Squadron Energy, according to four sources.

Ares is funding the purchase with preferred equity, two of the sources added.

Federation and Squadron will continue to develop the 1.4 GW Bungaban wind farm in Queensland through a joint venture. The British/Australian miner Rio Tinto has agreed to buy 80% of the wind farm’s output for 25 years.

The acquisition is still waiting for Foreign Investment Review Board approval, which should come next month, two of the sources said.

With advice from Barrenjoey Capital, Federation has been hunting for an investor to help it buy the remainder of Windlab since mid-2023 but it looked to have missed out to Canada’s Brookfield.

The Brookfield acquisition was never consummated, and the Canadian investor went on to buy renewables developer, Neoen. Mid-way through this year a new bidder for the business emerged, although it was not clear at the time that the investor was working with Federation.

Federation is now set to pay a bit less than the AUD 300m (USD 200m) that Brookfield was preparing to pay for the stake, two of the sources said.

In June 2020, then ASX-listed Windlab was acquired by Squadron and Federation. Federation already had an 18% stake but brought in Squadron to acquire 75% of the developer, with Federation taking the rest.

The 2020 transaction put a value of AUD 68m on the business, which looked to have been entirely recouped when the owners sold Windlab’s South African business for USD 55m.

Squadron bought CWP Renewables from Partners Group for AUD 4bn at the end of 2022. That transaction brought with it a 1.1 GW operating portfolio, a 5 GW mid-term and 15 GW early-stage development pipelines, making it the largest Australian renewables transaction to date.

Ever since the CWP purchase, Squadron has been considering its options for Windlab.

Windlab has connected nearly 1.2 GW of new clean energy and has a pipeline of more than 20 GW of new clean energy projects, according to its website.

But in the years after it was taken private, Windlab struggled to progress some of its projects, like many Australian wind developers.

Windlab co-owns the Kennedy Energy Park Phase 1 hybrid wind, solar and battery project in northwest Queensland with Japan’s Eurus Energy.

The 60 MW project reached financial close in 2017, and construction was completed the following year, but the project was only connected to the grid in 2019 and only recently started exporting all its power to the grid.

The company’s Upper Burdekin Wind Farm, also in Queensland, was scaled back from 950 MW to 408 MW amid concerns that it could damage the habitat of koalas, Sharman’s rock wallabies, masked owls and red goshawks.

Apple had agreed a PPA with the project but dropped out after the environmental questions were raised.

Upper Burdekin, renamed Gawara Baya, has now received regulatory approvals and is proceeding towards financial close, according to its website.

An official at Federation declined comment. Spokespeople at Squadron and Ares did not respond to requests for comment.