Herbert Smith Freehills Kramer (HSF Kramer) and Allens have advised on Edify Energy’s first-in-market AUD3 billion (USD2.15 billion) development and project financing of the Smoky Creek and Guthrie’s Gap Solar Power Stations in Central Queensland.
The Smoky Creek and Guthrie’s Gap Solar Power Stations comprise around 720MWp of solar generation capacity and 600MW/2,400MWh of battery storage, making them among the largest solar and battery hybrid developments under construction in Australia.
The financing comprises around AUD3.35 billion in committed funding across the two projects, as well as other projects with initial approval.
HSF Kramer’s projects, energy and infrastructure, and finance teams advised across multiple aspects of the transaction. The cross-practice team was led by partners Alison Dodd, Gabby Herron-Cartwright, Elizabeth Charlesworth, Jon Evans, Cassandra Wee and Skye Kirby, alongside Luke Simpson, managing partner for real estate in Asia and Australia.
“We advised Edify Energy on all aspects of the transaction, from the procurement process to the land arrangements and the financing,” Herron-Cartwright told Asia Business Law Journal.
“The nature of the transaction, combined project financing of two separate hybrid BESS (battery energy storage system) and solar projects, each with their own construction packages, long-term offtake agreements with Rio Tinto and capacity investment scheme agreements (CISAs) with the Australian government meant that there needed to be close co-ordination.”
She added that several hurdles had to be navigated to ensure the transaction proceeded smoothly.
“As far as renewables projects go, this transaction had plenty of challenges: the development and financing of not one, but two very large hybrid solar and BESS projects, a relatively novel reverse-DC coupled configuration for the projects, a multi-party contracting structure where minimising gap and interface risk was essential, the complex interplay between the Rio Tinto offtakes and the CISAs, and the extra regulatory and policy compliance requirements that come with government support. Not to mention the challenges associated with establishing a first-of-a kind greenfield secured financing platform,” Herron-Cartwright said.
“Added to this was also the additional overlay of needing to navigate complex supply chains and pricing of inputs in the current volatile geopolitical climate and the challenge of working with what is a very large bank group for a renewables project financing.”
Allens acted for a syndicate of 16 domestic and international lenders, advising on a complex financing structure that included an Australian-first greenfield renewable energy debt financing platform. Sydney-based partner Scott McCoy spearheaded the team, which also included managing associate Tristan Kelly, associate Cara Kenny, lawyer Nick Walker and law graduate Tom Woods.
ICA Partners, a boutique advisory firm, served as Edify Energy’s financial adviser.
