Australia’s Clean Energy Finance Corporation (CEFC), the government body aiming to mobilise capital investment in the country’s renewable energy sector, has introduced an AU$250 million (US$175 million) financing programme for the development of large-scale solar.
The programme, which will be the largest lending commitment for utility-scale solar ever in Australia, will be directed at accelerating the development of >10MW projects with loan requirements of AU$15 million or more.
CEFC chief investment officer Ted Dow said: “The CEFC finance will be available for projects which have power purchase agreements, as well as those proposing to take some merchant risk.”
Dow added that financing will be available over a longer term at a fixed rate in order to give extra certainty and confidence to developers and producers in the supply chain for the still-developing, large-scale sector in Australia.
Dow claimed there is a funding gap in the sector, therefore, CEFC also aims to encourage other sources of finance to back large-scale solar through co-investment and debt equity.
The body is also focusing on support for projects within other large-scale renewable energy schemes, including the ACT’s 50MW Next Generation Solar initiative, the Queensland Government’s 40MW solar auction, and Ergon Energy’s AU$150 million renewable energy programme.
CEFC has already made significant investments in large-scale projects including the 56MW Moree Solar Farm in New South Wales (AU$46 million), Australia’s largest solar and battery storage project to date at Sandfire Resources’ DeGrussa copper mine in Western Australia (AU$15 million), and remote solar projects in the Northern Territory (AU$17 million).
The new financing programme also complements an AU$100 million funding programme from the Australian Renewable Energy Agency (ARENA), which is currently developing a competitive round for 200MW of large-scale solar PV, under the Advancing Renewables Programme.
An ARENA spokesman told PV Tech that it is expected that the expressions of interest for the round will open in early to mid September. The metrics and criteria for the round have not yet been finalised.
Dow said: “Projects seeking finance from the CEFC and funding from ARENA will benefit from our organisations working together during each stage of the application process, to minimise transaction and due diligence time and costs.”
“The installation of large-scale solar has lagged behind residential solar, which is estimated to reach about 5,000MW of installed capacity this year. While the costs of large-scale solar PV are decreasing, this financing boost will help Australian projects move down the cost curve, in line with international trends.”