Queensland outshines rivals by closing 300MW of solar

The Ross River Solar Farm, the largest of its kind in the state of Queensland to date, has reached financial close along with three other projects. 

The A$225 million ($169 million; €155 million), 148 MW facility is being funded through equity commitments from Palisade Renewable Energy Fund, a vehicle launched late last year by Australian fund manager Palisade Investment Partners, and three institutional investors comprising the Clean Energy Finance Corporation (CEFC), VicSuper and HESTA. 

Senior debt arrangements are provided by Australia and New Zealand Banking Group, Bank of Tokyo-Mitsubishi UFJ and Westpac. The project secured a long-term power purchase agreement with EnergyAustralia last December, with operations expected to commence after 12 months of construction. 

“The close of the project was achieved without CEFC debt finance or a grant [from the Australian Renewable Energy Agency], representing a significant achievement for Queensland’s solar industry and another step towards reducing the nation’s carbon footprint,” commented Gerard Pike, a partner at Herbert Smith Freehills, legal advisor to debt financiers on the project. 

The ARENA and the CEFC, respectively Australia’s state-run clean energy investor and its financier, are helping the country achieve its goal of having 23.5 percent of its electricity generated from renewable sources by 2020. 

In addition to the Ross River project, the CEFC recently committed a combined A$31.5 million in financing to two large-scale solar schemes in Queensland, the latest projects to be backed under its large-scale solar financing programme. About half of CEFC’s A$300 million commitments in total financing has gone to projects based in Queensland, forming a portfolio of 210MW large-scale solar. 

The two projects, which have a combined capacity of 40MW, are being developed by Canadian Solar, which has secured long-term PPAs with the state government, debt finance from Bank of Tokyo-Mitsubishi UFJ and a grant from the ARENA. 

APA Group, an Australian natural gas business, also completed its acquisition of the 110MW Darling Downs solar farm from local electricity and gas supplier Origin Energy on 1 May. This is the second solar project owned by APA, following its first solar investment in Western Australia’s 20MW Emu Downs Solar Farm in December 2016.  

The A$200 million transaction, which APA funded with its own cash and operating cash flows, as well as with an A$20 million ARENA grant, also includes funding for development costs and the option to acquire the nearby Beelbee Solar Farm, a 150MW facility under development. The Darling Downs project will sell its output to Origin under a long-term PPA until December 2030.