Bungala Solar PV Project
Reach Solar energy (Reach) today announced financial close on the first phase of the 300MWac Bungala Solar Photovoltaic (PV) project near Port Augusta, and at the same time, entered sale agreements with Enel Green Power (EGP) and the Dutch Infrastructure Fund (DIF).
The Bungala Solar project will be built on land leased from the Bungala Aboriginal Corporation, about 12km from Port Augusta. On full completion it will produce enough electricity for around 130,000 homes, is able to assist the grid with ancillary services, and is 'energy storage ready' for the future.
The financial close milestone for Bungala Solar One incorporates debt and equity commitments for the project's second phase, Bungala Solar Two. Both projects will be delivered without financial support from government.
Origin Energy will purchase all electricity and renewable certificates produced by both solar projects under a Power Purchase Agreement signed in late 2016. The renewable solar energy is firmed up using Origin's generation and gas supply portfolio in South Australia and the national electricity market.
The construction of the solar farm will create a positive benefit for the Port Augusta region. The first electricity will be supplied to the grid by first quarter 2018, with 220MWac (2 x 11 OMWac) fully operational by third quarter 2018.
Reach Chief Executive Officer, Mr Tony Concannon said he was very pleased with achieving financial close in parallel with finalising the sale agreement.
"We're delighted to announce today financial close on the first phase of the Bungala Solar project and the project sale to the EGP and DIF equal joint venture," Mr Concannon said.
"This transaction marks the largest equity and debt finance arrangement in Australia for a solar PV project and is great news for the Port Augusta community as it transforms into a renewable energy hub. The project is aligned to the recent energy policy announced by the South Australian Government, and has very experienced parties across all aspects.
"EGP is a world class renewable operator and DIF is a world leading fund management company. They both have exceptional track records in investing and operating infrastructure and energy projects globally. Their investment and the excellent fit with Origin's portfolio ensures the success of the Bungala Solar project," Mr Concannon said.
Marko Kremer, Head of Australasia for DIF Management Australia added: "DIF is delighted to add Bungala Solar farm to its existing investment portfolio. We are excited to be part of the Australian renewable energy landscape which supports the nation's commitment to a greener economy as well as creating significant job opportunities in the Port Augusta region. This investment represents an attractive, large scale solar PV energy investment, underpinned by stable, long term contracted cash flows."
Origin Managing Director Frank Calabria said: "We congratulate Reach and the Enel and DIF consortium on reaching this milestone and we look forward to working with the new owners. We are Australia's largest supporter of utility scale solar and are proud to add Bungala to the growing list of projects we have underpinned with a long term power purchase agreement, helping us deliver increasing amounts of renewable energy to meet the needs of our customers."
Mr Concannon also acknowledged the close engagement and ongoing role of the land owner, Bungala Aboriginal Corporation and unwavering assistance from both the South Australian Government and Port Augusta City Council.
South Australian Aboriginal Affairs and Reconciliation Minister Kyam Maher said: "It's great that the PV solar plant proposal is on Bungala land and, as part of the agreement, there is a focus on Aboriginal employment that will provide flow on economic benefits to the local Aboriginal community."
Professional services firm PwC also played a significant role in advising Reach across the full breadth of the Bungala Solar project including integrated legal, tax, capital advisory, debt advisory, due diligence and financial model audit services.
"Quite simply, this transaction would not have been possible without the work delivered by PwC who have been with us from the start and shared the risk with us. Led by Damian McNair, Chris McLean and Tiffany Barton, more than 60 PwC employees across different business lines provided fully integrated specialist advice built on their knowledge of the energy sector and investment market," Mr Concannon concluded.
About Reach Solar energy
Reach is focused on developing utility-scale, grid connected solar photovoltaic projects which deliver a competitive and predictable electricity tariff, and renewable certificates, for its customers. It is on track to develop over 1 OOOMW of solar PV in Australia by 2020/21.
The management team at Reach Solar energy has significant experience with the management of large electricity generation and retail companies, plus a proven track record for the development and delivery of complex, utility-scale power projects, utilising structured project finance.
Mr Tony Concannon
e: firstname.lastname@example.org .au
m: 0416 490 393
Mr David Webster
m: 0411 381 803
ADDITIONAL PROJECT DETAILS
How much energy will Bungala produce?
The Bungala Solar Project will eventually be a 300MWac solar farm with 220MWac by September 2018. It will produce enough electricity for around 130,000 homes from nearly 1.2 million solar PV panels.
Who will the solar energy be supplied to?
Origin Energy is the customer for all electricity and renewable certificates produced by both the solar projects i.e. 220MWac. The Bungala solar project complements Origin's retail, generation, and fuel supply portfolio. Offtake negotiations continue for the balance 80MWac site capacity including the ongoing SA Government tender process.
What does financial close deliver?
The financial close milestone for Bungala One (11 OMWac) includes debt and equity commitments for the second phase (another 11 OMWac called Bungala Two) which is expected to complete in the third quarter of 2017.
Who owns the project?
The project has been sold by Reach Solar energy to an equal joint venture consisting of EGP and DIF. It will be built on land leased from the Bungala Aboriginal Corporation.
How many jobs will be created and when will construction start?
The construction will create some 350 jobs in the Port Augusta region with design to start immediately. The first electricity will be supplied to the grid by first quarter 2018, with 220MWac fully operational by third quarter 2018.
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ADVISOR LIST FOR BUNGALA SOLAR PV PROJECT
Legal Finance (equity and debt) Tax Audit Modelling
Technical & Environmental
Price Waterhouse Coopers
Willis Towers Watson
ACIL Allen Consulting