X-Elio reaches financial close on 200 MW solar farm as CEFC commits $37 million

Renewable energy developer X-Elio announced on Thursday it had achieved financial close for its 200 MW Blue Grass Solar Farm with Australia’s Clean Energy Finance Corporation (CEFC) committing $37 million towards the south-east Queensland project.

The CEFC invested in the project as part of a syndicate of lenders including Dutch-headquartered financial group ING and Japanese financial institution Sumitomo Mitsui Banking Corporation (SMBC).

The Blue Grass solar farm, located 14km west of Chinchilla in the Darling Downs Renewable Energy Zone (REZ), is X-Elio’s first major project in Australia and its largest to date and is expected to generate 420 GWh of green energy annually when complete.

The 200 MW solar plant, which will connect to the grid via the existing Chinchilla to Columboola transmission line, is expected to offset approximately 320,000 tonnes of CO2 emissions per year.

X-Elio’s Australian country manager Belinda Fan said the Blue Grass solar project represents the opening phase of the company’s long-term interest in Australia’s energy transition with full commercial operations expected in Q1 2022.

“We’re thrilled to have achieved financial close for the Blue Grass Solar Farm – our largest solar project in Australia and one that strengthens our position in the domestic renewables market where we continue to pursue new growth opportunities,” she said.

“This includes more than 600 MW of projects in our development pipeline which is growing exponentially each year.

“X-Elio is a global business with a local mindset, and we are committed to enhancing economic and social outcomes in the local communities and regions where we operate.”

CEFC chief executive Ian Learmonth said the government-owned green bank’s $37 million investment in the project supports the “latest solar technology” to further strengthen the nation’s renewable energy grid while supporting the Australian Renewable Energy Agency-led (ARENA) “30 30 30” initiative that is designed to achieve ultra low-cost solar.

The initiative aims for solar PV to achieve 30% efficiency at 30 cents per installed watt by 2030 and is expected to help drive down costs to meet the goal of solar electricity generation at $15 per MWh.

The Blue Grass Solar Farm features an estimated 375,000 bifacial solar modules, which Learmonth said have an increased generation capacity compared with existing panels, as well as half-cut cells technology which reduces the cell to half the normal size.

“Blue Grass Solar Farm will include the latest technology that this innovative sector can deliver and will truly be a solar farm for the 21st century,” he said.

Learmonth said the CEFC’s commitment is its 32nd solar farm investment since inception and a further demonstration of the critical role it plays in Australia’s transition to net zero emissions.

“This latest renewable energy investment demonstrates that CEFC expertise and capital is central to the ongoing evolution of the sector,” he said.

“Since our earliest investments, the CEFC has been instrumental to the development of renewable energy capacity, which is pivotal to cutting emissions across our economy.

“With this latest investment we are proud to have contributed to the delivery of more than 3.5 GW of low-emissions generating capacity, including 2 GW of solar and 1.5 GW of wind. This clean energy will underpin our energy transition for generations to come.”

Learmonth said the investment builds on new renewable energy investment commitments by the CEFC of $810 million in 2020–21, representing a 53% increase on the $529 million of the previous year and reflecting its investments in large-scale battery projects and the landmark Snowy 2.0 grid infrastructure expansion.

“The transition to net-zero emissions requires substantial decarbonisation, at a much faster pace than we are currently achieving,” he said. “One of the most effective ways to do that is to fortify Australia’s renewable energy sector and reduce the cost of solar PV generation to help meet stretch targets for technologies such as green hydrogen, low-emissions steel and aluminium.”

X-Elio’s successful financial close for the Blue Grass Solar Farm comes more than one year after it announced a “landmark” virtual power purchase agreement (VPPA) for the output of the solar plant with US-based software company Salesforce.

X-Elio said it had signed a 10-year agreement with Salesforce which will purchase 25% of the Blue Grass output, contributing to its commitment to reach 100% renewable energy by 2022. It is the US tech giant’s first renewable energy offtake agreement in Australia.

The Queensland Government-owned generation company Stanwell will also purchase a share of energy generation, to help meet customer demand for green energy and contribute towards Queensland’s ambition to generate 50% of its electricity needs from renewables by 2030.

X-Elio, which is co-owned by US investment firms Brookfield and KKR, said the Blue Grass project represents the opening phase of the company’s long-term interest in Australia’s energy transition where it plans to leverage its 17 years’ experience as a global leader in the development, construction and operation of solar PV projects, having built 2.6 GW solar PV plants across more than 10 markets globally.

X-Elio currently has 25 solar plants in operation in 13 countries, including the 42 MW Marcovia solar farm in Honduras and the Guanajuato solar farm in Mexico. The company is also developing the Forest Glen (120 MW) and Wunghnu (80 MW) solar farms in New South Wales and Victoria respectively.