Eco Energy World secures financing for two merchant projects

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UK-based renewable energy developer Eco Energy World (EEW) has secured financing for two large-scale projects in Queensland that will be developed on a merchant basis.

The 20 MW Chinchila Solar Farm in the Darling Downs and the 34 MW Brigalow Solar Farm near Toowoomba, which will sell electricity and LGCs on the spot market, have been acquired by Impact Investment Group (IIG) for their Solar Asset Fund.

EPC services are being provided by Gildemeister Energy Services and senior debt for one of the projects was provided by Infradebt, a private sector infrastructure fund manager.

While one of the main revenue streams for merchant projects in Australia – the Large-scale Generation Certificates (LGCs) – are forecast to completely lose value in a couple of years, a number of companies are still pushing ahead with merchant projects seeing them as economically viable.

For instance, Carnegie Clean Energy broke ground on its merchant 10 MW Northam Solar Farm earlier this year, while China’s Risen has fully acquired Western Australia’s largest solar farm – 132 MW Merredin Solar Farm – and the 121 MW Yarranlea Solar Farm in Queensland, which it plans to operate entirely on a merchant basis.

Although it firmly believes in the viability of merchant projects, EEW went through a a lengthy and trying process to secure the financing.

“It’s been challenging to develop merchant solar in Australia, but our innovative and hardworking team has delivered on our target,“ Svante Kumlin, founder and CEO of EEW, said.

“We believe this is the new business model for renewables and will enable subsidy free renewables to out compete carbon energy in Australia and elsewhere in the world.”

EEW says it expects to soon announce reaching financial close on the remainder of its 900 MW ready to build solar projects in Australia.

In a separate release on Tuesday, IIG tried to set the record straight following The Australian’s misleading reporting about its Solar Asset Fund, suggesting that Australian tech billionaire Mike Cannon Brookes was making unfair profits through the fund as a result of financial support from the government, and that electricity prices are high as a result of the switch from coal to renewables. 

The Solar Asset Fund already owns the 19 MW solar farm at Swan Hill in Victoria, which started operating in July.