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New Energy Solar to acquire BERYL SOLAR PROJECT

Power News - Published on Thu, 26 Jul 2018

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New Energy Solar announced that it has entered into binding agreements to acquire the Beryl Solar Farm (Beryl) from a subsidiary of First Solar, Inc. Beryl is the second project that NEW has acquired from First Solar in Australia, following the announcement of the acquisition of the Manildra Solar Farm. Under the agreements, and subject to the satisfaction of conditions precedent, NEW will acquire a 49% interest in Beryl shortly after construction has commenced. Once Beryl reaches commercial operation (targeted for mid-2019), and subject to remaining consents and conditions, NEW will acquire the remaining 51%.

Beryl is located approximately 5km west of Gulgong, NSW, in one of the three priority renewable energy zones identified by the NSW Government. On full commercial operation, the plant will sell approximately 134,000 MWh of electricity per annum to Transport for NSW under a 15 year power purchase agreement to meet the electricity requirements of the Sydney Metro Northwest railway.

Total construction cost is expected to be approximately AUD 187 million. NEW’s acquisition price is confidential, but based on a target unlevered five-year annual average gross yield of 8.2%1 per annum, compared to the current gross annualised yield on NEW’s existing operating portfolio of approximately 6.8%4 per annum.

Mr John Martin, CEO of NEW said that “Beryl, NEW’s second investment in Australia, will further enhance the scale and contracted cashflows of our Australian portfolio. The 15-year PPA term, longer than PPAs currently offered in the Australian market, diversifies our contract tenor profile and underpins investor returns. Following the Manildra acquisition last month, we are delighted to be consolidating our relationship with First Solar through this second sizeable transaction in the Australian market.”

Subject to the satisfaction of conditions precedent customary for a transaction of this nature, NEW will acquire Beryl on a levered basis, funded with cash reserves and existing and new debt facilities. The project’s construction debt facility, provided by Société Générale, MUFG Bank, and Mizuho, will convert to an A$ term facility at completion. The underlying interest rate is c.81% hedged throughout the initial term, reducing exposure to future movements in domestic interest rates.

New Energy Solar’s Head of Investments, Liam Thomas said that “Beryl is an ideal project for our second Australian acquisition, and we are very pleased to have added a project of this scale and quality so soon after Manildra. Once completed, approximately 20% of New Energy Solar’s portfolio will be in Australia. The project provides stable $A cashflow under the long-term PPA with TfNSW. The PPA structure, under which the majority of the offtake is contracted, is consistent with our strategy to secure predictable, low-risk returns for investors. At the same time, the uncontracted volume allows us to explore other PPA arrangements, battery storage and other value-enhancing options.”

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Posted By : Nanda Koijam on Thu, 26 Jul 2018
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