Herbert Smith Freehills’ full service project finance team has advised Kennedy Energy Park Pty Ltd (KEP) in relation to the construction, offtake, grid connection and project financing of the Kennedy Energy Park, located in the Flinders Shire in central north Queensland, which reached financial close on 18 October 2017. The project is expected to be fully operational within twelve months.
The innovative “proof-of-concept” project will comprise a 15MW(AC) solar array, 43.2MW(AC) of Vestas wind turbines and 2MW(AC) of Li Ion battery storage provided by Tesla and will be financed by a combination of equity contributed by sponsors Eurus Energy Holdings Corporation (Eurus) and ASX listed Windlab Limited (Windlab). The Clean Energy Finance Corporation provided $93.5 million long term debt finance and the Australian Renewable Energy Agency (ARENA) provided $18 million of grant funding.
KEP has secured a power purchase agreement with CS Energy Ltd (CS Energy) who will purchase electricity and Large Scale Renewable Certificates (LRECs) generated by the project. The electricity generated will enter the grid through a connection into the Cape River to Hughenden 66kV transmission line, which runs adjacent to the project site and will meet the demand of the local region, stretching from Julia Creek through to Charters Towers. The wind and solar construction services will be provided by Vestas Wind Systems and Quanta Services under an engineering, procurement and construction (EPC) contract with KEP.
The Herbert Smith Freehills team was led by partner Gerard Pike and executive counsel Alison Dodd who were supported by senior associates Rupert Baker, Caroline Rowe, Rhiannon Hough and solicitors Josh Attard, Dinisi Sirimanne, Erin MacMullin and Michael Thurin.
Herbert Smith Freehills partner Gerard Pike said, “It is exciting to see an innovative large-scale renewable energy project like the Kennedy Energy Park enter construction. The use of battery storage along with co-sited wind and solar, will demonstrate that renewable energy can reach very high levels of availability in the face of criticism about a lack of ‘dispatchability’ of renewable generation. Congratulations to KEP, Eurus and Windlab on their vision and hard work in achieving Financial Close.”
KWM advised the financiers on the project financing and Allens advised ARENA.
This deal is another example of Herbert Smith Freehills’ market-leading work in the renewable energy sector. Other recent examples include:
· advising ANZ, MUFG and SMBC on the project financing of the 100MW(AC) Lilyvale Solar Farm in Queensland;
· advising AGL Energy and lenders on the 453MW Coopers Gap Wind Farm;
· advising the Clean Energy Finance Corporation, Commonwealth Bank of Australia and Natixis on the project financing of the 150MW(AC) Daydream and 50MW(AC) Hayman greenfield solar farms to be located in Collinsville, Queensland.
· advising Engie and Mitsui on all aspects of the 119MW Willogoleche Wind Farm in South Australia.