Bank of China provides a $30 million AUD loan for the 13 MW Mugga Lane PV Solar Plant Project

Project narrative

On October 15, 2015, financial close was reached on a $30 million AUD ($22.05 million USD) term loan agreement provided by Bank of China (BOC) to Zhenfa Canberra Solar Farm One Pty Ltd — a special purpose vehicle (SPV), now known as Mugga Lane Solar Park Pty Ltd, that is wholly owned by Australia-based renewable energy developer Maoneng Australia Pty Ltd (Maoneng Group) — for the 13 MW Mugga Lane PV Solar Plant Project. The proceeds of this loan were to be used for the development and construction of a 13 MW solar photovoltaic facility in Tuggeranong, Canberra, Australian Capital Territory (ACT); specifically, the solar park was located located on the corner of Mugga Lane and the Monaro Highway, adjacent to the Mugga Lane Resource Management Centre in Canberra. The solar farm featured tracking panels capable of following the sun. The project was supported by a guaranteed 20-year feed-in tariff (FIT) through the ACT Solar Auction. Under this contract, the solar farm would receive $178 AUD for each megawatt of electricity generated. In 2013, Chinese solar firm Zhenfa New Energy Science and Technology Co., Ltd. won an ACT government contract to supply solar power, and it developed the Mugga Plane Solar Park Project under this contract. However, in 2015, the Australian management team of Zhenfa's Australian arm bought out Zhenfa Australia Pty Ltd; as a result Zhenfa Australia were rebranded under an Australia-owned and operated company, Maoneng Group. There afterwards, Maoneng and AVIC International Hold Corporation (AVIC INTL), developed the $38.09 million AUD project. In addition to the BOC loan, Norddeutsche Landesbank (NORD LB) issued a loan in support of this project. UGL Limited won the engineering, procurement, and construction (EPC) contract to implement the project; it also won an operations and maintenance (O&M) contract for the plant was selected to render EPC services for the solar PV power project. UGL is the O&M contractor for the solar PV power project. The panels for the plant were imported from China. ACT Geotechnical Engineers administered a geotechnical investigation for the Mugga Lane Solar Park, providing information on the subsurface conditions, engineering properties of soils, and any constraints. Additionally, Maoneng signed a contract with ActewAGL for the grid connection for the farm. Decmil Group Limited (DGL) and Nextracker Inc. were also involved in implementation. The solar park was designed to produce 24,500 MWh of clean energy in its first year of operation, and would reduce carbon emissions by 23,000 tons of annually, the equivalent of removing 4,600 cars annually for the next 30 years. The energy generated by the farm would be sufficient to power 3,000 homes. The farm included 48,000 solar panels, with adjustments to reduce glare for motorists on the Monaro Highway. Construction was expected to employ up to 30 people, but only two employees would be required to run the farm once operational. Construction began on March 17, 2016; the developers expected that the farm would be operational by the end of 2016. The solar park was officially inaugurated on March 2, 2017. After completion, the Mugga Lane Solar Park fell into financial issues, specifically in regards to Mugga Lane's debt. By 2022, the majority of the $27 million AUD debt remaining on the project came from Nord; the loan itself matured in May 2022. Maoneng began to search for alternative debt sources to refinance the project and even considered selling the project. Then, in April 2022, Nord imposed controls on Mugga Lane's bank accounts because Maoneng had been allegedly operating them without authorization from Nord; $1.48 million AUD had been withdrawn in February/March 2022 to provide a loan to another Maoneng project, which likely breached the terms of the loan agreement. Nord issued a notice of debt on April 20, 2022 and sought a return of money, or, in the absence of an immediate return, a time line to return it. Maoneng, incapable of repaying the loan, Korda Menthe as voluntary administrators on May 5, 2022 before Nord then appointed Wexted Advisors as receivers on May 16. Also on May 5, 2022, Mugga Lane's directors also provided an undertaking to Nord to repay the loan by May 30, 2022, but it failed to do so. By this time of its voluntary administration, Mugga Lane had become one of Australia's oldest utility-scale solar farm. KordaMentha began to immediately explore sale options and it expected significant interest in the 52-hectare site.