Enel, through a joint venture between the Group’s fully-owned renewable energy subsidiary Enel Green Power S.p.A. (“EGP”) and Dutch Infrastructure Fund (“DIF”), has closed an agreement to acquire Bungala Solar One, the first 137.5 MW1 phase of the 275 MW1 Bungala Solar PV project, which is currently the largest ready-to-build solar PV project in Australia, from Bungala Solar Holding Pty Ltd., a subsidiary of Australian developer Reach Solar Energy Pty Ltd.
The purchase of Bungala Solar Two, the second phase of the project, is expected to be closed in the third quarter of this year. The Bungala Solar project is located near Port Augusta in South Australia.
“The acquisition of Australia’s largest PV project, which takes us onto a new continent, is an important step forward for the Enel Group,” said Francesco Starace, Enel CEO and General Manager. “The Australian renewable energy market is characterised by abundant resources and growing demand. Enel will work to harness these resources and contribute to the Australian economy, generating shared value for all our stakeholders through a strategy that delivers industrial growth built upon a foundation of sustainable development.”
The joint venture’s total investment in the 275 MW1 project is around 315 million US dollars, including project construction, with Enel contributing around 157 million US dollars. The total investment will be financed through a mix of equity and project finance with a consortium of local and international banks. The project is fully contracted with a long-term power purchase agreement with Origin Energy, a major Australian utility.
Construction works at Bungala Solar One are expected to begin by mid-2017, followed by Bungala Solar Two, whose construction will start by the end of this year. The overall 275 MW1 project will be fully operational by the third quarter of 2018.
The Bungala Solar project is designed to generate around 570 GWh a year, equivalent to the consumption needs of approximately 82,000 Australian households, avoiding the emission of about 520,000 tonnes of CO2.
Australia is a country of great interest for the Enel Group due to its abundance of renewable sources (in particular sun and wind), a growing demand for renewable energy, its network infrastructure and the existing regulatory framework as evidenced by the Federal Government’s Renewable Energy Target (“RET”) programme. RET has set a target of having 23.5% of energy generated from renewable sources by 2020 and is complemented by State-level initiatives aimed at increasing renewable energy generation through a tender-based mechanism.
Enel is a multinational power company and a leading integrated player in the global, power, gas and renewables markets. It is the largest integrated utility in Europe in terms of market capitalisation and rates among Europe’s leading power companies in terms of installed capacity and reported EBITDA. The Group operates in over 30 countries worldwide, producing energy through approximately 85 GW of managed capacity. Enel distributes electricity and gas through a network of over 2 million kilometres, and with over 65 million business and household customers globally, the Group has the largest customer base among European competitors. Enel’s renewable energy division Enel Green Power already manages almost 38 GW of wind, solar, geothermal, biomass and hydropower plants in Europe, the Americas, Africa, Asia and is now arriving in Australia.
DIF is an independent fund management company focused on investments in high quality infrastructure assets that generate long-term, stable cash-flows such as public-private partnerships, renewable energy projects and other core infrastructure projects. DIF was established in 2005 and has invested in and manages more than 180 projects across the social infrastructure, transport and renewable energy sectors. DIF’s investors comprise of top tier pension funds, insurers, banks and funds of funds.