Our finance continues to fill a private sector financing gap.
Since inception, CEFC finance has helped accelerate the delivery of more than 1GW in additional solar energy – equating to enough electricity to power about 375,000 average homes – with projects in Queensland, New South Wales, Victoria and the Northern Territory.
While total CEFC solar investments represent just one per cent of Australia’s total electricity generation, they represent a substantial reduction in carbon emissions, of around 1.8 million tonnes annually, making an important contribution to Australia’s overall emissions reduction goals.
Despite the welcome increase in private sector investment in large-scale solar projects, CEFC finance remains necessary to fill a gap in investor appetite for projects that are in the process of finalising power purchase agreements, or which have entered power purchase agreements with corporates or other offtakers outside the large investment grade energy companies.
Australia’s large-scale solar market continues to mature, with growing interest from private sector financiers in refinancing projects once they are contracted and/or operational, because of the perceived lower investment risk.
For a project sponsor, refinancing may offer the opportunity to borrow at a reduced cost once the project has achieved commissioning and a contracted revenue stream. The CEFC’s role as an ‘interim’ financier is helping to ultimately crowd in additional private sector investment to support the sector’s continued development.
Victoria's largest solar farm, the 88MW Bannerton Solar Park, is located in the state's Sunraysia district, on an almond orchard no longer suitable for planting. The development is drawing on $98 million in CEFC finance, with equity investment from the Foresight Solar Fund and Korean investors. A significant proportion of its projected output is already contracted to Alinta Energy, as well as the Victorian Government, which plans to use solar power for Melbourne's iconic tram network.
SOLAR SOLUTIONS FOR THE REEF
The 150MW Daydream and 50MW Hayman solar farms in Queensland reflect the CEFC’s focus on delivering clean energy solutions in the Great Barrier Reef catchment area. The projects, located in a former coal mining hub, take advantage of the area’s high insolation rates to accelerate the low emissions transformation of the electricity grid. The CEFC finance of $90 million is part of a syndicated debt facility, alongside the Commonwealth Bank and French investment bank Natixis. BlackRock Real Assets is an equity investor.
NSW SOLAR GENERATION BELT
The 150MW Coleambally Solar Farm is part of the emerging solar generation belt in regional NSW. While NSW has the largest electricity demand in Australia, it has a relatively low penetration of large-scale solar generation. The project is expected to abate about 300,000 tonnes of carbon emissions annually. Developer Neoen Australia secured $30 million in CEFC finance, and has contracted 70 per cent of the project output to EnergyAustralia.