CEFC announces next wave of large-scale solar finance, with $77m for projects in Queensland and Victoria

13 March 2017

The Clean Energy Finance Corporation (CEFC) has announced the latest wave of successful transactions under its large-scale solar financing program, investing $77 million in three new projects in Queensland and Victoria. 

With this investment, the CEFC has now exceeded the initial $250 million target for its large-scale solar program, with combined commitments of $281 million in seven projects to date. Other projects are nearing finalisation.

The latest three large-scale solar projects are all expected to be operational by the start of 2018, adding a combined 165MW (AC) of renewable energy to the national electricity grid, enough to power an estimated 87,000 homes.

The projects will lead to 300 jobs during construction. The projects are being developed by Australia's Edify Energy, alongside leading international renewable energy investor WIRSOL. They include:

• The 57.5MW (AC) 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 around 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), as part of its large-scale solar funding round.
• The 57.5MW (AC) Hamilton Solar Farm, also north of Collinsville in Queensland, which is expected to generate around 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 PPA with EnergyAustralia. It is expected to generate about 116,000MWh of energy annually, enough to power an estimated 25,000 homes. This is the CEFC's first commitment to a Victorian solar farm.

The CEFC, Commonwealth Bank and Germany's NORD/LB have committed to a syndicated senior debt facility to support the three projects. Edify Energy and WIRSOL are providing equity. The transaction is Australia's largest single solar project financing deal to date.

CEFC Large-Scale Solar program lead, Gloria Chan said: "This latest package of transactions sets an exciting new benchmark in the provision of finance to accelerate the development and delivery of renewable energy projects in Australia.

"The Commonwealth Bank and NORD/LB worked alongside the CEFC to complete the financing over a longer tenor, which is notable given the merchant price risk component of the project. This trend of increasing competition and appetite for renewables among domestic lenders is central to the ongoing development of large scale solar in Australia."

The investment package includes financing for Victoria's first large-scale solar farm, representing the achievement of an important new milestone in the state's renewable energy transition.

The two Queensland projects take advantage of the area's 300-plus days of sunshine each year, while also reflecting the CEFC's focus on delivering clean energy solutions in the Great Barrier Reef catchment area, as part of the Reef Funding Program.

Edify Energy Chief Executive John Cole welcomed confirmation of the financing package, which will allow the projects to begin construction in the near future.

"We applaud the work of the CEFC in lending to large-scale solar projects, in this case, side-by-side with both domestic and international commercial lenders.  This diverse lenders' group is testament to the quality of the three projects," Mr Cole said.

"Large-scale solar is finally growing at a pace and making a real impact in Australia's energy mix.  We will seek to maintain the strong community interest throughout the construction period and into operations scheduled for early next year."  

The CEFC recently announced a $150 million investment commitment to three large-scale solar projects in regional New South Wales, as well as a $54 million commitment to the innovative Kidston Solar Project near Townsville, which is looking to combine solar generation with pumped hydro storage. These projects have also received ARENA funding. Separately, the CEFC also committed to a $20 million equity investment in Australia's largest solar farm, at Ross River in Queensland.

"We created our large-scale solar program as a means of providing tailored finance to accelerate large-scale solar projects in Australia at the lowest possible cost," Ms Chan said.

"We have been pleased with the very strong level of interest we have received. We are seeing increasing confidence in the sector, and a growing appetite by investors to support both contracted projects and to take merchant energy price risk.

"Through our recent investments, we have also seen a continued reduction in the cost of solar energy, to the point where it is increasingly competitive with other forms of electricity generation, confirming the central role of solar energy in Australia's renewable energy mix."

ABOUT EDIFY ENERGY

Edify Energy is an Australian renewable energy development and investment company, founded by John Cole in 2015.  It provides development capital to projects, and works with its partners to ensure high quality renewable energy projects are structured, financed, brought into operation and managed.  Edify Energy is funding and supporting the development of a large portfolio of renewable energy projects and is committed to producing clean green electricity for Australian electricity consumers.  For more information visit www.edifyenergy.com

ABOUT WIRSOL

WIRSOL Energy Limited (a subsidiary of WIRCON GmbH) is a customer focused company in planning, financing, installation and maintenance of renewable power stations of all sizes.  WIRSOL brings all of these components together smoothly for customers and investors.  WIRSOL focuses on carefully selected large onshore wind and solar projects, together with integrated energy management and storage solutions.  Our market is addressed under the own brands WIRCON and WIRSOL, as well as in close collaboration with energy providers looking for de-centralised renewable solutions to enhance their so far commodity based business models.  WIRSOL have just opened Australian offices located at Suite 101, 39 East Esplanade, Manly, NSW.  For additional information visit: www.wircon.eu

ABOUT ARENA

ARENA was established by the Australian Government to make renewable energy technologies more affordable and increase the supply of renewable energy in Australia. Through the provision of funding coupled with deep commercial and technical expertise, ARENA provides the support needed to accelerate the development of promising new solutions towards commercialisation. ARENA invests in renewable energy projects across the innovation chain and is committed to sharing knowledge and lessons learned from its portfolio of projects and information about renewable energy. ARENA always looks for at least matched funding from the projects it supports and to date has committed $1.1 billion in funding to more than 270 projects. For more information, visit arena.gov.au