CEFC provides $98.5m debt finance to Victoria solar farm

The Clean Energy Finance Corporation (CEFC) says it has agreed to provide all the debt finance needs for what will be Victoria’s largest solar farm in a bid to accelerate the project, which it says will help bring stability and diversity to the state’s energy supply.

The CEFC says it will provide $98 million in debt finance towards the 88MW (AC) Bannerton Solar Park, which was last week sold to a consortium of equity investors led by the UK private investment manager Foresight Group.

The solar farm, which will be the biggest in the state to date, won a contract for the state’s tram network and will supply the state government with renewable energy certificates. It also has a contract with energy retailer Alinta.

CEFC CEO Ian Learmonth said the CEFC had invested as the sole debt financier in order to accelerate the project which, due to the rapidly falling cost of constructing solar in Australia, is being developed without any grant support.

“Previously it wasn’t viable to construct solar of this scale in Victoria, which has good insolation rates, but not as high as the northern states,” Learmonth said in a statement.

“We have witnessed rapidly improving economic conditions that now make this project commercially viable without the need for grant funding.

“What’s more, through the recent agreement struck with the Victorian Government, Bannerton Solar Park will effectively help power Melbourne’s iconic tram network, reducing the city’s public transport emissions, making an important contribution to decarbonisation of the economy.”

Co-developer Syncline Energy, which is based in Victoria, said the project is being built on non-arable land owned by an almond farm, and should be completed by July next year.

The CEFC said the Bannerton project is helping build diversity in Victoria’s evolving renewable energy mix, as the state embraces renewable energy alternatives to replace its aging coal-fired generators.

It said the project’s inverters, will also help provide voltage support on the grid and will meet the Australian Energy Market Operator’s newly enforced requirements for continuous uninterrupted operations in the event of grid faults.

In March, the CEFC announced its first solar farm investment in Victoria, committing finance to Edify Energy’s 50MW Gannawarra Solar Farm, west of Kerang. It has also provided finance to the Ararat Wind Farm, and for the final stage of the Portland Wind Farm in south west Victoria.

Bannerton has given the $130 million construction contract to CIMIC and UGL.