One of Australia’s oldest and most richly rewarded solar farms sold after debt dispute

Mugga Lane, one of Australia’s first utility scale solar farms, and one of the most richly rewarded, has been bought by renewable investor CleanPeak Energy in a deal reportedly worth $30-40 million.

The profitable 13.3 megawatt (MW) solar farm was put up for auction by administrators last year after a dispute over an inter-project loan.

CleanPeak Energy, which was founded by former Citi banker Philip Graham in 2017, is paying for the project through its funding vehicle CPERI trust and cash from Commonwealth Bank of Australia, according to the AFR.

RenewEconomy is seeking comments from CleanPeak Energy, which has mostly focused on commercial-scale rooftop installations.

Mugga Lane was put into voluntary administration in May last year, despite having a guaranteed 20 year, $178/MWh contract with the ACT government that delivers revenue of at least $4 million a year from its output.

The dramatic move came after the project’s banker, Nord, questioned a loan paid out to another of owner Maoneng’s projects.

Maoneng was looking for a new banker for Mugga Lane’s $27 million debt load before May last year, when Nord sought to put controls over the projects’ bank accounts before issuing a default notice in April.

The cause for Nord’s nervousness was a total of $1.48 million withdrawn across a series of transfers in February or March and loaned to another Maoneng project. Administrators Scott Langdon and David Osborne of Korda Mentha described the loan as a likely “breach of terms”.

The sale of Mugga Lane reduces Moaneng’s standalone solar projects to just Sunraysia Solar Farm, as the company moves quickly into big batteries.

The company secured finance for $2 billion of battery and solar projects in October from Hong Kong real estate fund Gaw Capital, and grid approval for the 240MW/480MWh Mornington Peninsula big battery in May last year.

Maoneng said the Mugga Lane loan, made to an unnamed other project, couldn’t be repaid so Nord appointed Korda Mentha as voluntary administrator on May 5 and Wexted Advisors as receiver the following day.

Wexted sold the debt to hedge fund PAG during an auction last year and they will hand over control of the solar farm to CleanPeak, which will be the energy investor’s first ground-mounted solar farm.

Aside from the hefty debt load, accounts issued by Korda Mentha last year show profits of $1.3 million in fiscal 2021, and $2.2 million for a portion of the 2022 financial year.

Mugga Lane was one of seven wind and solar farms that won the ACT government’s first tender on its way to its target of sourcing the equivalent of 100 per cent of its electricity from renewables.

Korda Mentha said 21 potential buyers accessed data-room documents which led to four serious bids.