Another Australian wind project reaches financial close as global oil giant sells out

The Kondinin wind project in Western Australia is to begin construction after becoming the latest of a flurry of wind projects to reach financial close, easing pressure on the federal governments broader renewable plans and helping the state government prepare for its imminent exit from coal.

The UK-based Foresight Group announced on Wednesday that it had reach FiD (financial close) for the 130 megawatt (MW) first stage of the Kondinin wind project, after securing a $430 million debt financing package from a syndicate of mostly Australian banks, including CBA, Westpac and ANZ.

But Foresight is saying goodbye to its joint venture partner in the project, the oil giant Shell, which has sold its stake as part of a general retreat (along with most of the rest of the oil industry) from renewable investments. Foresight will now have full ownership of the Kondinin project, which envisages up to 370 MW.

Kondinin will be the fourth wind farm to begin construction in WA’s main grid amid a burst of activity designed to ensure enough capacity is delivered before the planned closure of the last of the state-owned coal generators in 2029.

Work has already begun on the Waddi and Narrogin wind projects, the first turbine deliveries have been made to Kings Rocks (pictured above), and the last turbine has been completed at the expansion of the Warradarge wind farm.

Iron ore mining giant Fortescue is also about to erect the first turbine at the Nullagine wind project in the Pilbara, which is not connected to the state”s main grid.

Some of these projects, like Kondinin, Neoen Australia’s Narrogin and Atmos Renewables’ Parron Maam Marang wind project, have obtained important power purchase agreement from the state-owned utility Synergy which has been critical to get their financing deals over the line.

The biggest of these projects, the 470 MW Parron Maam Marang wind farm, is expected to reach FiD soon but has already announced a key construction contract.

The Kondinin project has also received an underwriting agreement under the federal government’s Capacity Investment Scheme.

The project was originated by WA-based developer Lacour in 2016, when it was planned to be a wind, solar and battery hybrid, and sold it to Shell and Foresight in 2022.

“Foresight has also taken full ownership of Kondinin at an important point in its development. We thank Shell Energy for its contribution to progressing the project and for its partnership over the past four years,” Daniel Beaver, the portfolio manager of the Foresight, Australian Renewables Income Fund, said in a statement.

“Our focus now turns to delivering Stage 1 and progressing the subsequent stages of the broader Kondinin Energy Project.”

Beaver said community engagement has included early discussions with local businesses on potential business and supply opportunities, engagement with Traditional Owners, and the establishment of a community benefit fund, providing $150,000 a year (CPI indexed) for local projects over the next 25 plus years from the start of construction.

“Kondinin is a long-term investment in the region as well as in Western Australia’s energy system,” Beaver said. “The support and engagement we have received from landholders, the Shire and the local community has been important in getting the project to this point.”

Stage 1 is expected to support 145 direct jobs during construction and begin supplying renewable electricity into the South West Interconnected System from late 2028. The first stage of the project will comprise 21 Vestas V162-6.2 MW turbines.

Foresight is an investment fund listed on the London Stock Exchange and its Australian Renewables Income Fund (ARIF) is a wholesale, unlisted unit trust established to invest in renewable energy in Australia and New Zealand. 

Its portfolio includes six operational wind farms, three operational hydro power stations, and an operational portfolio of 16 solar farms, mostly small projects under 5 MW, which spans the NEM and the WEM. It has a 3 GW development pipeline.

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