CEFC supports new solar farm and renewable energy fund

Clean Energy Finance Corporation

Wednesday, 08 February, 2017

The Clean Energy Finance Corporation (CEFC) will invest $20 million in the Ross River Solar Farm near Townsville, accelerating the development of what is said to be Australia’s biggest solar farm.

The Ross River site — a disused mango plantation southwest of Townsville — is in an area of high solar irradiance and close to the electricity grid. The $225 million solar farm will cover more than 200 ha, with some 450,000 solar panels using horizontal tracking technology to best harness the sun’s energy. When completed in 2018, the farm is expected to generate enough energy to power the equivalent of 65,000 homes.

The 116 MW AC (142 MW DC) project is being developed by solar farm developer ESCO Pacific and infrastructure manager Palisade Investment Partners. It has secured a 13-year power purchase agreement (PPA) with EnergyAustralia, which is understood to be the largest single solar PPA in Australia to date.

CEFC’s investment is the first in a series of large-scale solar investments the corporation will make in Queensland this year as it works with developers on speeding up the delivery of clean energy opportunities. This is also the first time the CEFC has taken an equity stake in a solar farm.

“By investing equity in the early stage of such projects, we are looking to unlock much-needed capital to support an accelerated growth path,” said CEFC Investment Funds Lead Rory Lonergan. “This means renewable energy projects can be built more quickly and begin generating power to the grid sooner.

“As an equity investor, we are also further demonstrating the commercial strength of clean energy projects. This is one way in which we can help create investment opportunities for Australian institutional investors such as superannuation funds, which are expressing a growing appetite for sustainable investments.”

The CEFC is also looking to attract mid-tier and large institutional investors to support the next wave of renewable energy projects, announcing a $75 million cornerstone commitment to a specialist renewable energy fund managed by Palisade Investment Partners.

“Australia requires very significant investment in new clean energy projects in order to meet the Renewable Energy Target,” said Lonergan. “At the same time, institutional investors have a growing appetite for sustainable investment opportunities which can diversify their portfolios and meet the needs of their members. This new fund is specifically designed to meet these needs in a positive way that can really accelerate new investment in Australia’s clean energy potential.”

The Palisade Renewable Energy Fund (PREF) is looking to inject as much as $500 million in new investment to accelerate the development of a pipeline of clean energy projects, focusing on both construction and operating renewable energy assets (with the ability to also consider late-stage development opportunities). The fund already has three seed assets in its portfolio — the above-mentioned Ross River Solar Farm, the Waterloo wind farm and the Hallett 1 wind farm (the latter two based in South Australia).

“In many cases, mid-tier institutional investors lack the scale to invest directly in projects,” said Lonergan. “Through our cornerstone investment in the PREF, we are looking to unlock this investment potential and tap into the growing investor appetite for renewable energy investment opportunities, with both mid-tier and large institutional investors. By increasing the available equity, we can enable projects to be developed sooner, increasing our clean energy capacity and driving down development costs.”

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