European Energy reaches financial close on first Australia solar project

Denmark-based European Energy, which this year signed a contract to build what will be the biggest solar project on Australia’s main grid, says it has reached financial close for its first solar project in the country.

The company says it has secured project finance debt from Nord/LB’s Singapore branch for the 56 MW Mokoan, which is being built on grazing land near Winton in Victoria.

The Mokoan solar farm has already begun construction and is expected to be complete next year, but it will be dwarfed by the scale of the 1.3 GW Upper Calliope solar farm it has largely contracted to mining giant Rio Tinto to help supply its refineries and smelters in Queensland.

“We are thrilled to reach our first financial close in Australia,” Catriona McLeod, the country manager for European Energy in Australia, said in a statement.

“We see this as the start of many projects by European Energy in the country. We are eager to leverage our capability across renewable energy development, EPC, financing and operations to contribute to meeting Australia’s renewable energy targets.”

Thorvald Spanggaard, the company’s head of project development, said Australia presents a highly promising market for renewable energy projects.

“Currently, we have over 5 GW under active development in Australia and a further 3 GW in screening, and we aim to realize these in the coming years.”

The Upper Calliope solar project is scheduled to start construction in 2025 or 2026, although it needs to get through the development application first. Rio Tinto has also announced it will sign up to take most of the output of the 1.4 gigawatt (GW) Bungapan wind energy project which is planned by Windlab.

European Energy has another gigawatt solar project in the pipeline, called Sawpit in central Queensland, as well as other wind and solar projects that it has not yet announced.

European Energy reached its final investment decision on the Mokoan project in November, 2023, after receiving development approval from the local council in late 2018, and planning approval from the state government in June, 2020.

The project will span 94 hectares and feature bifacial panels, which can generate power reflected on to cells at the back of the solar modules.

The Nord facility was structured under what is known as a “deemed PPA”, which assumes that a power purchase agreement will be struck, and adjustments made to the terms of the debt when that occurs. For the moment, there is no PPA locked in, and it will operate on a merchant basis otherwise.