Société Générale and the Clean Energy Finance Corporation (CEFC) have lent A$100mn to a solar project in Northern Queensland.
The Kidston Solar Project Phase One (KSP1) is a future 50MW facility 270km north west of Townsville, in one of the highest solar radiation areas in Australia. It will be operated by Genex Power, an Australian company.
Genex will use the funding to transform an old gold mine into a solar PV facility that will increase the renewable energy generation in Queensland by 6%, and is part of a wider package of projects the government is looking to install.
The company will also pump in equity from its own books and will draw a grant worth A$8.85mn from the Australian Renewable Energy Agency (Arena). It has appointed the US company First Solar to supply solar modules for the first installation, and hopes to start sending power to the grid by the end of the year.
Genex is also looking to secure funding for a 250MW pumped hydro storage project in the same location, a project has been praised by the leader of the solar lending team at CEFC, a government agency.
Gloria Chan says: “Energy storage solutions such as pumped hydro are one of the next steps in our clean energy transition. With the cost of solar generation continuing to decline, we are committed to working with developers such as Genex to finance opportunities that can complement Australia’s growing renewable energy capacity, by adding energy storage and grid stability services.”
Arena, for its part, is supporting 12 big solar farm projects in Australia as part of a plan to make them more attractive to private lenders. The 12 projects, Arena estimates, will unlock around A$1bn of private investment in Australia’s solar sector.
Genex managing director Michael Addison says: “Genex was pleased to work closely with the CEFC on the financing of phase one of the Kidston Renewable Energy Hub. As an ASX-listed company focused on renewable energy generation and storage, we are pleased to partner with the CEFC to develop this project. The development of the Kidston Renewable Energy Hub is an important step in the transition of the Australian economy to a clean, low carbon economy.”
GTR reported in December that CEFC lent A$120mn to a wind farm project in New South Wales, followed into the deal by commercial lenders including the Commonwealth Bank of Australia and SMBC.
The agency has come a long way since being banned by previous prime minister Tony Abbott from financing wind power and household solar in July 2015, a move which cast a huge shadow over Australia’s renewables sector.
John O’Brien, the CEO of Australian green energy consultancy Cleantech, told GTR recently: “The last two years have been very hard. A lot of international renewables companies have packed up their Australian offices and gone to work in Brazil or South Africa, and that’s the politics: it’s ridiculous. We got rid of Tony Abbott, and it’s slowly coming back to a more sensible place.
“There’s a green and renewable energy target in Australia to generate 33,000GW/h by 2020, which is around 20% of the total energy mix. That’s going to drive a lot of investment. It hasn’t really taken off yet, everything was on stall for at least two years. There’s going to have to be 5,000MW of wind or solar by 2020 so there’s going to be a lot of money spent.”