This is a landmark achievement for MPower, marking the first time that direct sales of clean energy will contribute to group revenue and earnings. Lakeland is the forerunner of a distributed portfolio of clean energy generating and storage assets that MPower is establishing across Australia.
Located in Cooktown Shire, North Queensland, Lakeland comprises a 10.8 MWac solar farm and an associated 1.4 MWac/5.3 MWh lithium-ion battery storage facility. The project has been in operation since 2017 and has a future operating life of around 20 years. It benefits from a long-term power purchase agreement with Origin Energy for 100% of the solar power output, which runs until 2030.
Through its acquisition of the Lakeland project, MPower expects to generate annual revenues of around $1.8 million from the sale of energy and large-scale generation certificates (LGCs) to a blue-chip counterparty.
MPower expects Lakeland to contribute around $800,000 in annual earnings before interest, tax, depreciation and amortisation (EBITDA), before the introduction of additional cost-saving measures.
MPower will focus on achieving operational improvements and will look to upgrade existing project infrastructure, including the implementation of the company’s proprietary solution for the control and monitoring of renewable energy projects.
Along with the sale of solar energy, the Lakeland project’s lithium-ion battery storage capacity further enhances MPower’s capability to own and manage assets in the burgeoning battery storage sector.
It marks the company’s first entry into Queensland, further nationalising its market footprint which currently includes development sites in New South Wales, Victoria and South Australia.
Under the terms of the Share Purchase Agreement with Kawa Australia Developments Pty Limited, MPower has acquired 100% of the shares in Lakeland Solar & Storage Pty Limited.
The transaction has an enterprise value of $8 million, with deferred consideration for the Project of up to $0.35 million over a three-year period following completion, and the assumption of an existing $7.66 million limited recourse long-term debt facility in place with German bank NORD/LB.
To finalise the deal, relevant third-party consents have been obtained.
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