CEFC commits $750 million to development of landmark NSW energy transformation project
5 May 2025
The CEFC has confirmed its latest investment via the Rewiring the Nation Fund, with a $750 million concessional finance commitment backing development and construction of the Central-West Orana Renewable Energy Zone (REZ).
NSW electricity consumers will get the needed build, but avoid up to $130 million in costs as a result of the CEFC’s eight-year concessional loan (nominal terms).
The Central-West Orana REZ – the largest REZ to be developed in Australia – will play a critical role in the NSW energy supply as coal-fired generators approaching the end of their design life exit the system at an unprecedented rate, with AEMO forecasting about 83 per cent of the NSW coal fleet will retire by 2031–32 – and the entire 8.3 GW of NSW coal generation to be decommissioned by 2037–381.
Through this investment, we are seeing CEFC finance “crowd in” substantial additional private sector capital to back this landmark REZ, which will be truly transformational for the NSW energy mix.Ian LearmonthCEFC CEO
The integrated generation and transmission Central-West Orana REZ network will enable as much as 7.7 GW of additional renewable energy power to reach consumers – more than three times the generation capacity of the 2.2 GW Snowy Hydro 2.0 scheme.
CEFC CEO Ian Learmonth said: “The rapid exit of so much coal from the NSW energy system is unprecedented. Investing in new transmission to get new, lower cost, cleaner renewable energy into the grid is critical to managing this transition.
“Through this investment, we are seeing CEFC finance “crowd in” substantial additional private sector capital to back this landmark REZ, which will be truly transformational for the NSW energy mix. We are pleased to be one of a number of financiers who have come together to make up this important financing syndicate, giving developer ACEREZ confidence to accelerate project delivery.
“By providing our finance on concessional terms, which are more favourable than otherwise available in the market, we are also lowering the overall financing cost to NSW electricity consumers.
“This financing package represents another significant milestone for the NSW economy and our National Electricity Market. The project is expected to deliver $3 billion in net benefits for NSW energy consumers, drive billions of dollars in regional investment and support 5000 jobs during peak construction. These figures are a powerful demonstration of the economy-wide benefits of investing in our net zero energy network of the future2.”
ACEREZ, a partnership of ACCIONA, COBRA and Endeavour Energy, was appointed network operator to design, build, finance, operate and maintain the Central-West Orana REZ transmission network3. It expects construction to begin from mid-2025 with energy to start flowing in late 20284.
With an intended network capacity of 6 GW, it will initially operate at 4.5 GW, supporting the grid connection of 7.7 GW of solar, wind and battery storage capacity5, equivalent to powering more than 2.7 million homes6.
The additional capacity will see the REZ play a vital role in delivery of the NSW Energy Infrastructure Roadmap, which aims to support the delivery of at least 12 GW of additional renewable energy generation and 2 GW of new long-duration storage by 2030.7
Rewiring the Nation Fund
With this latest investment, the CEFC has committed $3.65 billion through the Rewiring the Nation Fund8, across six transactions.
This includes a separate $490 million commitment to NSW EnergyCo to finance land and biodiversity costs related to the Central-West Orana REZ. NSW electricity consumers will get the needed land and development, but avoid up to $240m in project costs as a result of the CEFC’s 20-year concessional loan (nominal terms).9
The RTN Fund was created to spearhead investment in transmission infrastructure, long-duration storage, electricity distribution network infrastructure and distributed energy resources, and includes provision for the CEFC to offer concessional finance, on more favourable terms than otherwise available in the market, lowering the overall financing cost to electricity consumers.
Priority project
In the 2024 State of the Climate Report10, the CSIRO and Bureau of Meteorology noted that climate impacts are hitting home harder and more often for Australian communities. While emissions were falling, progress needed to accelerate, with the roll out of renewable energy infrastructure a top priority.
Energy system planners and operators have been shaping development of the Central-West Orana REZ for some time, with the Australian Energy Market Operator having previously classified the REZ as a priority project in its Integrated Systems Plan.
CEFC Rewiring the Nation Fund Chief Investment Officer Paul McCartney added: “The renewable energy projects hosted by the Central-West Orana REZ could take NSW half way to its goal of supporting 12 GW of new renewables by 2030.
“It is now well accepted that Australia can expect as much as 46 per cent of our coal generation to exit the energy system by 2030, and 100 per cent by 2038. Unprecedented change of this speed and scale can appear daunting. But there is cause for optimism and confidence, with Australia almost uniquely placed to benefit from these changes, particularly in regional and rural areas where the bulk of new investment is taking place.
“By accelerating progress on important transmission investments such as the Central-West Orana REZ, we are unlocking unprecedented scale zero emissions energy at our disposal, whether in the form of large-scale solar, wind and energy storage, or smaller-scale rooftop solar and batteries. These are game-changing investments that will help ensure Australia can draw on our abundant low cost clean energy to power our net zero economy of the future.
“The CEFC has been pleased to work with a diverse range of co-financiers who share our commitment to financing these large-scale and long-term infrastructure projects. Together with our ability to also offer a degree of concessional finance, we are seeing the power of CEFC capital to attract substantial additional investment while improving consumer outcomes.”
Additional community benefits
According to EnergyCo, additional community benefits from the REZ are expected to include:11
- A Community and Employment Benefit Program which will provide communities in the REZ with $128 million over four years from 2024. This is the first instalment of the hundreds of millions in funding that will flow to local projects and communities over the coming decades and create employment opportunities, collected from fees paid by the wind, solar and energy storage projects connecting to the REZ.
- New income streams for landowners from the lease payments for hosting new renewable energy and storage projects.
- The Strategic Benefit Payment Scheme, which will provide landowners hosting new high voltage transmission projects with a payment of $200,000 per kilometre of easement (indexed to inflation) paid out in annual instalments over 20 years.
- Employment and training programs to promote job opportunities and the use of local content, goods and services.
4 https://media.caapp.com.au/x7e2md.pdf
5 https://www.energyco.nsw.gov.au/news/central-west-orana-rez-access-scheme-headroom-decision
7 https://www.energyco.nsw.gov.au/about-energyco/electricity-infrastructure-roadmap
8 https://www.cefc.com.au/document?file=/media/5ehf3lsf/cefc_poweringnetzeroeconomy.pdf
10 https://www.csiro.au/en/research/environmental-impacts/climate-change/state-of-the-climate
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