Five commercial banks contributed to the financing of the AUD 511m (USD 354m), 29 MW East Rockingham Resource Recovery Facility (ERRRF) in Western Australia, according to market sources.
The five banks are ABN AMRO, KfW-IPEX, Mizuho Bank, National Australia Bank and Sumitomo Mitsui Banking Corporation, three sources familiar said.
NAB and SMBC were the lead arrangers in the financing, which closed yesterday, and Tribe Infrastructure was the financial adviser.
East Rockingham is being co-developed by New Energy Corporation, Hitachi Zosen Inova (HZI), and Tribe. Co-investors in the project include John Laing, HZI and ACCIONA.
John Laing will invest AUD 51.5m in equity. Technology provider HZI and builder Acciona are also investing equity in the project and the Australian Renewable Energy Agency is providing AUD 18m in recoupable grant funding, the parties announced.
The Clean Energy Finance Corporation (CEFC) recently agreed to invest AUD 57.5m in mezzanine debt and equity in the project, which will partially cover a AUD 100m rise in EPC costs for the project, two of the sources said.
The generator, to be located about 40km south of Perth’s city centre, is expected to burn about 300,000 tonnes of “residual waste” (non-recyclable material) from municipal, commercial and industrial sources and up to 30,000 tonnes per year of “biosolids”.
The developers said ERRRF is the first project of its kind in Australia to use “waste-arising” contracts. This allows councils to continue to reduce waste as the new contract allows them to also cut the amount of waste they supply the facility.
All Australian states are now working on so called “circular economy” strategies that prioritise the reduction, reuse and recycling of waste, which should ultimately leave less available to produce energy or to go into landfill.
New Energy Corporation Chairman Enzo Gullotti said in a statement the waste-arising model meant that councils would only pay for the capacity they used and would not be penalised if they successfully implemented waste reduction schemes.
“This is a win for the environment and represents real value for money for ratepayers who will be protected from the rising cost of landfill, particularly through the State’s landfill levy,” Mr Gullotti said.
The 36MW Avertas Energy – the country’s first large scale incinerator EfW plant to reach financial close – is being built at Kwinana, a few kilometres away from the East Rockingham plant.
Both projects have taken several years and gone through significant changes to reach financial close.