The backers of three large solar farms have locked in the final piece of their funding puzzle after securing debt financing from a group including the federal government and Commonwealth Bank of Australia.
Local developer Edify Energy and its German investor, Wirsol, will now look to begin work on the farms in Queensland and Victoria and have the first power flowing by early next year.
The $230 million deal finalised on Monday is the largest of its type for a solar project in Australia.
The combined project will add 165MW of renewable energy capacity to the national electricity grid by the start of next year and generate enough electricity to power an estimated 87,000 households.
The Clean Energy Finance Corporation (CEFC) will provide $77 million, taking its total large-scale solar commitments to $281 million across seven projects.
Mark Hogan, managing director of Wirsol Energy, said the international firm was “thrilled” with this deal, its first in Australia.
“This transaction firmly positions Wirsol as one of Australia’s leading renewable investors. We will continue building on this success by working alongside our trusted partners to fulfil our goals of deploying at least a further 500 MW of solar in Australia by 2020,” it said.
Template for growth
Two of the farms are backed by deals securing their supply but one will simply feed the grid.
Edify Energy chief executive John Cole said such deals would become more common.
“Transactions such as this demonstrate that the combination of project development and structuring expertise, and investment confidence is once again present in the Australian renewable sector,” he said.
“We have brought in tier one counterparties to create an overall package that has proven attractive to financiers and enabled the projects to become a reality.
“We are truly excited about replicating this approach with our partners across the rest of our development pipeline and making an impact in the Australian renewable energy market.”
The projects will lead to 300 jobs during construction as 675,000 panels are installed at the farms.
The Edify Energy projects are:
- The 57.5MW Whitsunday Solar Farm, north of Collinsville, which has a 20-year power purchase agreement (PPA) with the Queensland government. The project is expected to generate about 144,000MWh of energy annually, enough to power an estimated 31,000 homes. This project is also receiving up to $9.5 million in grant funding from the Australian Renewable Energy Agency (ARENA).
- The 57.5MW Hamilton Solar Farm, also north of Collinsville in Queensland, which is expected to generate about 144,000MWh of energy annually, enough to power an estimated 31,000 homes. Energy will be sold into the grid on a predominantly uncontracted or merchant basis.
- The 50MW (AC) Gannawarra Solar Farm, west of Kerang in Victoria, which has a 13-year deal with EnergyAustralia. It is expected to generate about 116,000MWh of energy annually, enough to power an estimated 25,000 homes.
The lending consortium brings together the CEFC, Commonwealth Bank and Germany’s NORD/LB.
CBA’s managing director and global head of infrastructure, Michael Thorpe, said the bank was proud to support the “landmark” transaction.
“The strong risk profile and expertise of both Edify Energy and Wirsol contribute to excellent project fundamentals of the Whitsunday, Hamilton and Gannawarra solar farms,” he said.
“As a major bank we are pleased to lend and invest in Australian renewable energy generation, and we will continue to support the ongoing growth of large-scale, commercially viable renewable projects in Australia and overseas.”
CEFC large-scale solar program lead Gloria Chan said the deal set a new benchmark.
“This trend of increasing competition and appetite for renewables among domestic lenders is central to the ongoing development of large-scale solar in Australia,” she said.