Australia’s Clean Energy Finance Corporation (CEFC) and specialist infrastructure debt investment manager Westbourne Capital have committed A$160mn to Singapore developer Nexif Energy for the second stage of a wind farm in South Australia.
The first stage of the Lincoln Gap project, near Port Augusta was backed by A$190mn in funding from the CEFC and Investec in November last year.
This additional CEFC commitment of A$50mn brings the Australian government-owned green bank’s total senior debt commitment in the project to A$200mn, which it says represents its largest investment in a single wind farm development to date.
“This debt finance package sees Westbourne Capital participating as a mezzanine debt lender alongside our senior debt commitment,” says CEFC wind sector lead Andrew Gardner. “The ability to fold mezzanine debt into finance for new build wind farms in this manner creates new investment opportunities for non-bank lenders to further support the growth of the renewable energy sector.”
According to Westbourne Capital managing director David Ridley, this is his firm’s second debt investment in the Australian renewables space, and demonstrates the growing interest from institutional investors seeking to access well-structured transactions in the sector.
This financing marks the latest in a string of Australian wind projects backed by the CEFC. Gardner recently told GTR that the sector is becoming more attractive to commercial financiers due to falling costs and improvements in technology.
“On the technology side, we’ve been seeing the level and cost of wind falling in Australia. That’s a function of capital costs, upfront construction cost, but also increased turbine sizes and longer turbine lives. The turbine sizes are helping the economics of the projects.”
The project is Australia’s first greenfield wind development to feature an unsubsidised large-scale grid-connected battery, and construction of this second stage is expected to begin in early 2019. Once finished, Lincoln Gap wind farm will represent a total investment of more than A$480mn by Nexif Energy in Australia.