Construction is set to begin on one of the largest solar projects in Australia’s development pipeline, after the 148MW Ross River Solar Farm this week achieved financial close.
Project developers ESCO Pacific and Palisade Investment Partners said on Monday that the $225 million solar farm, would be funded through equity commitments from Palisade’s Renewable Energy Fund, and three of the fund’s institutional clients, the Clean Energy Finance Corporation (CEFC), VicSuper and HESTA.
The companies said Palisade arranged the senior debt for the project from ANZ, The Bank of Tokyo-Mitsubishi UFJ and Westpac.
“Achieving financialclose on the Ross River Solar Farm demonstrates ESCO Pacific’s ability to deliver projects to a bankable standard,” said ESCO Pacific managing director and founder, Steve Rademaker.
“We have a significant pipeline of projects and a proven platform to deliver projects to market over the coming years,” he said.
The achievement follows closely on the project’s successful February signing of a 13-year power purchase agreement with EnergyAustralia, in what was one of the largest deal of its type in Australia at the time.
The PPA will see EnergyAustralia buy 80 per cent of the electricity generated by Ross River Solar Farm, which is to be located on former mango plantation near Townsville.
“Providing reliable, affordable and cleaner supplies of energy has never been more important than it is today,” EnergyAustralia managing director Catherine Tanna said in a statement in February.
ESCO, meanwhile, claims to have a solar development pipeline for Australia in excess of of 1.5GW. Since gaining approval for Ross River in June, 2016, the company says it has received approval for a further 470MW of solar farms in Queensland, alone.
Palisade, too, is likely to invest in other ESCO projects and is being backed by the Clean Energy Finance Corporation, which has committed $75 million to the Palisade Renewable Energy Fund, and $20 million to the Ross River project, its first direct equity investment in a solar farm.
The CEFC says the investment is the first in a series of large-scale solar investments the CEFC will make in Queensland this year as the organisation works with developers on speeding up the delivery of clean energy opportunities.
“The Ross River investment is also the first time the CEFC has taken an equity stake in a solar farm, sending an important signal to institutional investors about the commercial potential of greenfield clean energy developments,” it said in a statement.
Palisade CEO Roger Lloyd said the company had “spent considerable time identifying a pipeline of high quality renewables projects to augment our existing wind assets and deliver robust cash flows for our investors.”
In a statement on Monday, Palisade Renewable Energy Fund said it would continue to invest in renewables projects across the spectrum – from late-stage development through to operational assets – giving investors access to a broad range of opportunities that meet sustainability objectives and generate stable long-term returns.
Construction of Ross River Solar Farm is expected to take 12 months and will be undertaken by Downer Utilities Australia, which is also building the 100MW Clare solar farm and the 15MW Sunshine Coast solar farm, with oversight from CAT Projects as owner’s engineer.