Narrative
Full Description
Project narrative
On February 11, 2021, financial close was reached on the 400 MW New England Solar Farm Stage 1. To finance this project, a syndicate of banks – Bank of China (BOC), Commonwealth Bank of Australia (CBA), and Westpac Banking Corporation – provided a $212 million AUD loan to UPC\AC Renewables Australia for the construction of the solar farm. The loan carried a maturity period of five years and was led by the three banks. CBA provided a third of the funding. CBA provided a bank guarantee and Security Trustee solutions, interest rate hedging, and served as an account bank. Additionally, on January 15, 2021, AC Energy Corporation entered into a guarantee agreement with the project lenders for $260 million AUD ($185.5 million USD) to guarantee the obligation of New England Solar Project to the project lenders. UPC\AC Renewables Australia (now known as ACEN Australia) is an Australia-domiciled 50:50 joint venture between UPC Renewables and AC Energy and Infrastructure Corporation (ACEIC), the wholly-owned energy platform of Philippine conglomerate Ayala Corporation. This project sought to construct a utility-scale solar farm with a capacity of 400 megawatts of AC power (MWac) (521 MWdc) in Uralla, near Armidale in the New England region of north central New South Wales. The New England Solar Farm's two solar fields were located within the New England Renewable Energy Zone (REZ). The solar plant, which consisted of over 950,000 solar panels, was designed to power 240,000 typical New South Wales households annually, replacing the energy created by the expected-close Liddell Power Station. There were plans to expand the solar farm's capacity to 720 MWac in additional stages. A 400 MWh lithium-ion battery storage facility was also planned to be co-located at the solar farm, to help keep the electric grid stable and deliver energy during peak demand period; the first 50 MWh, which was supported by the Government of New South Wales' $75 million AUD ($58.4 million USD) Emerging Energy Program, was expected to be operational by mid-2022 in tandem with the first stage of solar installation. Additionally, the New England Solar Farm was expected to participate in the New South Wales Electricity Infrastructure RoadMap bidding process to secure a long-term energy services agreement with the Government of New South Wales. When completed, the first stage would be the joint-largest solar farm in Australia. The solar farm also featured single axis tracking technology designed to allow the panels to follow the Sun while keeping enough space for sheep to graze on the land between and under the panels. The NSW Independent Planning Commission provided development consent for the solar farm in March 2020. TransGrid, the owner and operator of New South Wales' electric transmission network, signed a grid connection agreement with the solar farm in June 2020. UPC/AC Australia named Elecnor Australia as the engineering, procurement, and construction (EPC) contractor around early October 2020; as the contractor, Elecnor Australia was responsible for the design, engineering, and procurement of the project and operation and maintenance services for its first two years of operation. Nextracker provided the solar panel trackers for the single axis tracking systems. Elecnor's subsidiary, Green Light Contractors, began construction at the end of 2020, focusing on substation and road design. At the time of financial closure, it was expected that the solar plant would connect to the National Energy Market (NEM) and generate energy by July 2022, with full operation for the end of 2023. The project was officially opened on March 16, 2023.
Staff comments
1. AidData has coded this transaction as a collateralized loan because Commonwealth Bank of Australia acted as the security agent (i.e. collateral agent) for the loan. When lenders take collateral as security for their loans, a collateral agent/security trustee is often appointed to enforce rights against the collateral in the event of the borrower's default under the loan. 2. The individual contribution of Bank of China to this $212 million AUD syndicated loan is unknown. However, it is known that CBA provided a third of the funding, or $70,666,666.6667 AUD, leaving only Westpac and BOC as the lenders on the remaining $141,333,333.333 AUD of the debt. For the time being, AidData has estimated the contribution of BOC by assuming that Westpac and BOC each contributed an equal amount ($70,666,666.6667 AUD) of that figure to the syndicated loan. 3. "Ayala firm completes financial closing on Australia solar project" claims that the loan was worth $619 million AUD, while the joint venture committed $320 million USD in equity, citing a statement to the media. However, Commonwealth Bank of Australia, in a statement posted to its website ("CBA finances NSW Solar Farm to help power 240,000 Homes") states that "[CBA] is one of three banks partnering to provide construction financing of $212 million to UPC\AC Renewables Australia..." and that "Commonwealth Bank will provide UPC\AC Renewables Australia with a third of the funding for the first stage of construction via a five-year syndicated debt facility...". AidData has based its coding of the loan value based on the CBA source; nonetheless, this issue merits further investigation. 4. There is a dedicated website for this project: https://newenglandsolar.com.au/.