Octopus makes first Australian investment with $322m solar farm

The London-headquartered investor says the deal will be ‘the first of many’ Down Under.

Octopus Investments has made its first deal in the Australian market by partnering with local renewable energy company Edify Energy to fund what is billed as the country’s largest solar power station at Darling Point near Griffith, New South Wales.

The two firms have arranged A$450 million ($322 million; €283 million) of financing for the project, a portion of which is debt financing from Commonwealth Bank of Australia and Westpac. Octopus declined to reveal the split between debt and equity, or any other financial terms of the deal.

A spokeswoman for Octopus said the firm’s stake represented “more than 90 per cent” of the equity in the project, with Edify Energy the only other equity holder. Edify developed and structured the project and will undertake the long-term asset management of the scheme on behalf of the pair.

Darling Point will be a 333MW solar farm once complete, with construction due to begin soon. It will produce enough energy to power around 115,000 homes once it is operational in early 2020.

The project has also secured a 10-year power-purchase agreement with Delta Electricity, lasting until 2030, for approximately 55 percent of its output.

The deal represents Octopus’ first foray into the Australian market since opening an office in Melbourne in 2018.

Octopus’ spokeswoman said the firm was confident that the deal would be “the first of many” for it in Australia, emphasising that its office was established with renewables opportunities firmly in mind.

Octopus managing director Sam Reynolds said in a statement: “Projects need to stack up economically, not just environmentally, for our investors. Darlington Point ticked the right boxes for us – there’s excellent solar resources in the region, plus it’s right next door to a major existing transmission substation and the site has development approval to accommodate batteries in the future.”

When it launched in Australia in 2018, Octopus said that it would look to deploy its own funds as well as raising new funds from local investors, but the firm declined to comment on the source of funding for the investment in Darlington Point.

According to figures released by Australia’s Clean Energy Council in December, 2018 was a record year for investment in renewables in the country, with the total value of projects completed or under way standing at A$26 billion.