WA raises $1.9bn from state’s first ever green bond to fund 50GW transition

Western Australia has launched its first ever green bond, raising $1.9 billion to help fund the state’s ambitious decarbonisation plans, including big batteries, wind farms and standalone power systems made of solar and storage.

The WA Labor government says the “heavily oversubscribed” green bond issue attracted $6 billion in bids from more than 60 investors. It matures in July 2033. 

WA wants to build 50 gigawatts (GW) of new renewable energy capacity in the next two decades, to cater to a jump in forecast electricity demand from new industries of 7.2GW.

That volume of electricity is currently 10 times that carried by the main grid, the South West Interconnected System (SWIS), and the state is fast tracking the construction of some 4000km of transmission lines and the development of renewable energy hubs.

The state is also planning to shut down its two state-owned coal power plants by 2030.

“Investors are increasingly interested in ESG performance, and I commend the Western Australian Treasury Corporation for the extensive work to issue the green bond and build the state’s ESG credentials with investors over the past two years,” said treasurer Rita Saffioti, who only took over the portfolio last week.

“The green bond issue was heavily oversubscribed, highlighting the confidence investors have in our commitment to deliver projects with positive environmental outcomes and our strong financial performance.”

The bond yield was 53 basis points above the 10-year Commonwealth bond yield, which was lower than initially expected by the WA Treasury Corporation.

It took two years of work to get the green bond across the line and part of the aim is to find cheaper funding from a bigger pool of investors. It will fund projects such as batteries and wind farms, electric vehicle charging infrastructure, and standalone power systems.

The state budget this year promised $2.8 billion for a range of new energy initiatives including a 2,000 megawatt hour (MWh) battery in Collie, which today would be the country’s largest, an 800MWh battery at Kwinana, and funding for several large scale wind projects and transmission upgrades.

It allocated $368 million for up to 210 MW of large scale renewables such as Synergy’s 150MW King Rocks project near Hyden in the wheatbelt region and a possible expansion of Bright Energy’s 180MW Warradarge wind farm near Eneabba north of Perth, and $126 million for grid upgrades and studies.

If all WA’s energy transformation plans come off, it will become a global green energy superpower with at least 11.5 GW of offshore wind proposed, 11.6 GWh of battery projects ranging from proposal to operational, and megawatts of solar under proposals, according to RenewEconomy’s maps.