French renewable energy and storage developer Neoen has locked in $370 million of finance for the 157MW Kaban wind farm in north Queensland, despite the project being denied a government loan by federal resources minister Keith Pitt.
In a statement on Monday, Neoen said it has reached financial close on the $370 million Kaban green energy hub, securing finance from a syndicate of five lenders that included BNP Paribas, HSBC, MUFG, NAB and NORD/LB.
Neoen Australia’s managing director, Louis de Sambucy, said Kaban would serve as one of the foundation projects for a new renewable energy zone being established in Northern Queensland.
“We are delighted to announce that our Kaban project has reached this important financial milestone. I would like to thank CleanCo Queensland and our lenders for their trust in our ability to deliver high-quality projects,” de Sambucy said.
The Kaban wind farm, to be constructed near Ravenshoe in the Atherton Tablelands, will use 28 wind turbines sourced from Vestas, deploying the 5.6MW V162 turbines that will be among the largest installed in Australia.
The wind farm will produce more than 450GWh of electricity each year – enough to power more than 100,000 Queensland homes.
It continues a rush of large scale wind and solar projects that have successfully been financed, including the massive 396MW Rye Park wind project in NSW, the Dulacca wind farm in Queensland, and two solar farms from Lightsource BP in NSW and Queensland.
Last week, Epuron indicated that it was moving forward on a major wind project of its own near Ravenshoe, not far from the Kaban project.
Neoen has already flagged that it may also add up to 100MW of battery storage capacity to the Kaban project but was still considering potential partners for the storage component.
The wind farm is expected to commence generation in 2023, after a 21 month construction period that will employ more than 250 construction workers. Early works have already commenced at the site.
Neoen had previously sought finance from the federal government’s Northern Australia Infrastructure Facility (NAIF) and won support from the NAIF board, before federal resources minister Keith Pitt intervened to veto the loan.
Pitt said that he vetoed the NAIF loan to the Kaban project because he did not think the project was consistent with Morrison government energy policies, including that it lacked an energy storage component – despite Neoen’s state intention to add a big battery to the project.
Pitt later refused to acknowledge that batteries can deliver “dispatchable” power and has subsequently signed off on $21 million in controversial grants to gas exploration projects in the Northern Territory.
The Queensland state government’s utility CleanCo stepped in to support the project by signing a 15-year offtake deal to purchase 100 per cent of the output from the wind farm.
CleanCo CEO Dr Maia Schweizer said the offtake agreement – in the form of an annual “capacity contract” rather than a megawatt hour price – would allow CleanCo to offer low cost and low emissions electricity supplies to Queensland’s large energy users.
“The Kaban Green Power Hub project provides critical system strength support for North Queensland,” Schweizer said.
“As an important part of CleanCo’s low emission generating portfolio, the renewable energy generated by this wind farm will allow us to offer affordable contracts to big energy users, translating to continued lower energy prices and increased competitiveness for Queensland businesses and communities.”
The project will also include a 320 km transmission line upgrade of the North Queensland coastal circuit, to be undertaken by PowerLink, as part of its broader infrastructure program to support the creation of new renewable energy zones in Queensland.