Changes to Funding Model for Lal Lal Wind Farms

June 19, 2018

From https://www.macquarie.com/uk/about/newsroom/2018/maccap-closes-project-financing-and-innovative-commercial-arrangement-for-lal-lal-wind-farms

“Macquarie Capital closes project financing and innovative commercial arrangement for Lal Lal Wind Farms

Macquarie Capital today announced it has closed project financing for the Lal Lal Wind Farms (Lal Lal) with two experienced global infrastructure investors, Northleaf Capital Partners and InfraRed Capital, each acquiring a 40 per cent interest in the project. 

Macquarie Capital has also sourced and structured an innovative commercial arrangement with Nephila Climate and Allianz Global Corporate & Specialty’s alternative risk transfer unit (Allianz), enhancing the value of, and confidence in, the project. The arrangement comprises two components, the first being a Proxy Revenue Swap (PRS) which helps to offset any production volume, timing of energy generation and future energy price risks. The second component is a corporate Power Purchase Agreement (PPA) with packaging solutions provider Orora Ltd., allowing Orora to lock in the cost of attaining baseload green energy. 

This is the first time a PRS and PPA have been combined in an arrangement of this nature in the Australian renewables sector. 

Ivan Varughese, Macquarie Capital Head of Infrastructure, Utilities and Renewables, Australia and New Zealand (ANZ), said: “Our extensive experience in the renewable energy sector globally is enabling us to bring innovative transaction structures and financing solutions to the Australian market. It’s positive to see innovative companies such as Orora adopting new solutions like this to access renewable energy.” 

The Lal Lal project will commit $100,000 worth of grants annually through a community benefit fund to support local initiatives. The project will generate approximately 160 local jobs during construction and eight during operations. 

Lal Lal comprises two sites at Elaine and at Yendon in Victoria and will have a generating capacity of 228MW, using 60 Vestas V136 3.8MW turbines, with civil and electrical construction undertaken by Zenviron. Once complete, Lal Lal will generate enough to power approximately 95,000 homes and save 780,000 tonnes of carbon dioxide each year. 

Macquarie Capital retains a 20 per cent interest in the Lal Lal project.”