Australian renewable energy group Pacific Hydro has been sold by owners IFM Investors to a Chinese investment corporation, signalling a return to confidence in the renewable energy sector.

Although the sale price was not disclosed, it is believed to be in excess of $3 billion. Investors became wary of the renewables industry when the Abbott government proposed significant cuts to the renewable energy target following a review by businessman Dick Warburton.

“This sale and the strong international interest in these assets demonstrate a restoration of faith in the future of renewable energy,” said Garry Weaven, chair of IFM Investors (Mr Weaven is also chair of The New Daily).

• NSW economy still the strongest
• Tourism boom paying off for Aussie airports
• Why Australia is sitting on a clean energy goldmine

The business was part of the IFM Investors Australian Infrastructure Fund, supported by industry superannuation funds including AustralianSuper, Cbus, HESTA, Hostplus, CareSuper and First Super.

The fund has returned 12.1 per cent after tax and fees per annum since it was created two decades ago. It also holds stakes in Melbourne and Brisbane Airports, Port of Brisbane, Port Botany and Kembla in NSW, and the lease to Melbourne’s Southern Cross Station among other infrastructure assets.

Pacific Hydro is one of the pioneers of renewable energy in Australia and has developed 900 megawatts of renewable generation across 19 projects in Australia, Chile and Brazil. Its portfolio includes wind farms across Victoria, South Australia and Brazil and major run-of-river hydro schemes in Chile.

Mr Weaven said the new owner, State Power Investment Corporation, has about 100 gigawatts of installed generation capacity worldwide and “is the right company to ensure continued investment in this important sector”.

IFM Investors wrote down its stake in Pacific Hydro by $685 million in October 2014 in the wake of the Warburton Report when it appeared the Abbott government would cut the renewable energy target for 2020 to 27,000 gigawatt hours from a planned 41,000 gigawatt hours.

Ultimately the target, which mandates the amount of renewable energy electricity retailers must buy, was cut to 31,000 gigawatt hours.

The higher target and the positive developments emerging from the Paris climate change talks late last year have returned some confidence to renewable energy investments.

IFM Investors, an umbrella group for a number of industry super funds, has part-owned Pacific Hydro since its inception in 1992 and bought the 68 per cent it did not own in 2005 for a price that valued the company at $950 million.

Pacific Hydro has invested heavily in expanding its renewable portfolio over the last 10 years.

Kyle Mangini, IFM’s Global Head of Infrastructure, said “the sale of Pacific Hydro represents a strong outcome and demonstrates IFM Investors’ absolute commitment to maximising value on behalf of our investors”.

“We are proud of the fact that Pacific Hydro has delivered multiple renewable-energy projects in three countries and pleased that the new owners will continue to invest in clean energy,” he said.