CEFC welcomes new ARENA priorities and will support $100 million large-scale solar program

14 July 2015

The Clean Energy Finance Corporation (CEFC) welcomes the Australian Renewable Energy Agency’s (ARENA) updated General Funding Strategy and Investment Plan, which includes a $100 million program to support the development of approximately 200MW of large-scale solar in Australia.

CEFC CEO Oliver Yates said: “The CEFC will continue to work closely with ARENA to identify opportunities for debt financing that can help maximise the potential of the projects ARENA supports, including projects that are part of the announced large-scale solar auction. We will continue to apply our commercial approach to investment in renewable, low emissions and energy efficient technologies.”

Mr Yates said: “The solar potential of Australia is obvious but financing for large-scale solar has been difficult due to market and policy uncertainty. The CEFC stands ready to invest and help catalyse the additional funding required for the growth of large-scale solar in Australia.”

According to Bloomberg New Energy Finance (BNEF), Australia currently has 68MW of commissioned large-scale solar capacity, including 59MW of solar photovoltaic (PV) and 9MW of solar thermal. A further 300MW of large-scale solar has secured finance or is under construction.

The CEFC has already invested in large-scale solar projects, including the 56MW Moree Solar Farm in New South Wales, a project which also received a grant from ARENA and was awarded IJ Global’s 2014 Asia Pacific Solar Transaction of the Year. The CEFC also played a leading role in helping South Australian based Sundrop Farms Pty Ltd secure capital for its approximately $150 million innovative application of solar thermal technology.

“By providing $46 million in senior debt financing for the Moree Solar Farm, we created a precedent in the Australian market for financing large-scale solar PV on a merchant basis. We were the sole lender as private sector debt for the project could not be secured at that time,” Mr Yates said.

“The Sundrop Farm project demonstrates perfectly the role and expertise the CEFC is bringing to facilitate increase flows of finance into the Australian clean energy market. By acting as an underwriter for up to $40m, the CEFC helped Sundrop Farms secure Australian and international capital to accelerate the development of their world-leading solar-thermal agriculture project,” Mr Yates added.

Large-scale solar is expected to play a growing role in Australia’s future energy mix, with BNEF estimating that Australia will need to build 3,200MW of additional solar by 2021, to meet the 33,000GWh Renewable Energy Target. According to BNEF, investment in large-scale solar out to 2021 will total some $5.5 billion.

The CEFC has already committed up to $141 million in large-scale solar related programs, with a pipeline of large scale solar project opportunities under consideration of over $160 million in total project value.

"We expect the construction of more large-scale solar capacity will help drive down future construction and maintenance costs as industry participants gain experience building and operating these large-scale solar projects. Over time, this will lower the cost of large-scale solar and lead to more projects being developed.” Mr Yates added.

The CEFC invests using a commercial approach to mobilise investment in renewable energy, energy efficiency and low emissions technologies as well as manufacturing businesses and services that produce the required inputs to clean energy technologies.

“The CEFC plays a complementary role supporting ARENA, investing alongside private sector co-financiers to facilitate increased flows of finance into the clean energy sector,” Mr Yates said.

“The CEFC will continue to fulfil its purpose by working to bridge the financing gap for projects that make commercial sense, reduce Australia’s carbon dioxide emissions and contribute to Australia’s productivity.” Mr Yates continued.