Funding for 2GW of large-scale solar sought from Clean Energy Finance Corporation
17 November 2015
The Clean Energy Finance Corporation (CEFC) has received strong market interest from more than 40 domestic and international project developers pursuing investment opportunities in the development of Australia's large-scale solar capacity.
The CEFC opened a $250 million lending program for large-scale solar in September, inviting expressions of interest from project proponents. The CEFC program complements a $100 million funding program opened at the same time by the Australian Renewable Energy Agency (ARENA).
"We have received very strong interest from project developers clearly looking to further develop Australia's large-scale solar capacity," CEFC CEO Oliver Yates said.
Projects range in size from 15MW to 200MW. By state, the proposed projects submitted for consideration include Queensland (the largest number of projects, for a combined 980MW); New South Wales (620MW); South Australia (220MW); Western Australia (100MW) and Victoria (135MW).
"The total capacity of the proposed projects is more than 2,000MW," Mr Yates said. "If all these projects proceeded to development, we would see a 10-fold increase in Australia's large-scale solar capacity. There is clearly strong investor interest in the potential of Australia's renewable energy sector."
Mr Yates continued: "Between ARENA and the CEFC we are now examining these proposals and working with the individual proponents to determine whether CEFC and/or ARENA finance is suitable. As with any commercial transaction, we would not expect all projects to proceed to conclusion. However we are very encouraged by the number and quality of proposals. Australia is uniquely placed to meet more of its energy needs from solar power, and the price of solar is falling as technologies improve and developers gain more experience in this area."
Minister for the Environment Greg Hunt said: "I am delighted to see the CEFC and ARENA working together under the umbrella of the Office of Climate Change and Renewables Innovation. This cooperation will help to drive down the cost of large-scale solar developments in Australia," Mr Hunt said.
"I am pleased that the Government's $350 million commitment for new large-scale solar projects has generated significant interest from investors. This will enable the large-scale solar sector to generate enough electricity to power around 120,000 average Australian homes."
The CEFC program is for loans of at least $15 million, for projects of 10MW or more, and will provide project proponents with access to fixed-rate, longer-dated senior debt.
"Australia currently has only four large-scale solar PV developments larger than 10MW. Through this financing program, we are looking to accelerate the development of large-scale solar as an important part of our renewable energy capacity," Mr Yates said.
"We will also seek to catalyse other sources of finance to support potential 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 has strong experience in financing large-scale solar developments, including:
- $46 million in senior debt financing for the 56MW Moree Solar Farm in New South Wales
- $15 million towards Australia's largest solar and battery storage project to date, at Sandfire Resources' DeGrussa copper mine in Western Australia
- $17 million towards remote solar projects in the Northern Territory
- The CEFC also played a leading role in helping South Australian based Sundrop Farms Pty Ltd secure capital for its approximately $150 million innovative horticultural application of solar thermal technology.
Media release, 2015