9 September 2015
The Clean Energy Finance Corporation (CEFC) today announced a $250 million boost to the construction of large-scale solar developments in Australia. When fully deployed, the CEFC financing program will represent the largest lending commitment to the large-scale solar sector in Australia to date.
Speaking at the Disruption and the Energy Industry Conference in Sydney today, CEFC Chief Investment Officer Ted Dow said the CEFC's $250 million program will help drive down the cost of solar development and further strengthen Australian industries in the solar supply chain. The program will support the accelerated development of solar PV projects of more than 10MW, with loan requirements of $15 million or more.
"The CEFC finance will be available over a longer term, at a fixed rate. We see this as critical to providing added certainty and confidence to developers and producers in the large scale solar supply chain, which is still developing in Australia," Mr Dow said.
"The CEFC finance will be available for projects which have power purchase agreements, as well as those proposing to take some merchant risk.
"We will also seek to catalyse other sources of finance to support large scale solar developments, through co-investment in debt and equity. In this way, we can help fill the funding gap in the large-scale solar sector, and encourage greater participation by banks and other institutions as the sector expands and develops a track record of proven credit and operational performance."
The CEFC funds complement a new $100 million funding program targeting large-scale solar from the Australian Renewable Energy Agency (ARENA). The CEFC is also targeting support for projects within other large-scale renewable energy programs, including the ACT's 50MW Next Generation Solar initiative, the Queensland Government's 40MW solar auction and Ergon Energy's 150MW renewable energy program.
"The installation of large scale solar has lagged behind residential solar, which is estimated to reach about 5,000MW of installed capacity this year. While the costs of large-scale solar PV are decreasing, this financing boost will help Australian projects move down the cost curve, in line with international trends," Mr Dow said.
"CEFC finance is currently supporting the development of about a third of the total 300MW of large scale solar currently installed or under construction in Australia. This additional funding is a significant commitment from the CEFC, reflecting our focus on building Australia's expertise in solar. When fully deployed, this $250 million program will be the single largest debt financing commitment to the large-scale solar sector to date."
Mr Dow said the CEFC had already invested in significant large-scale solar projects, including:
"By working closely with ARENA, and investing alongside private sector co-investors to bridge the financing gap for projects that make commercial sense, we're seeking to build Australia's expertise in solar and bring down development costs," Mr Dow said.
"Projects seeking finance from the CEFC and funding from ARENA will benefit from our organisations working together during each stage of the application process, to minimise transaction and due diligence time and costs."
Media release, 2015