ET Solar Australia Pty. Ltd. has reached agreement on a A$20 million debt financing facility with Clean Energy Finance Corp. (CEFC) for its business development in the Australian commercial solar market.
ET Solar will provide up to A$13.3 million in equity, while the CEFC will provide up to A$20 million in senior debt, which will enable the construction of commercial solar projects with power purchase agreements (PPAs).
The debt will be used to fund the build-up of solar projects between 30 kW and 2 MW to be developed and owned by ET Solar. Prospective electricity buyers include shopping centers, mines and manufacturing businesses. These commercial power users would enter into 10- to 20-year PPAs with ET Solar at pre-agreed rates.
‘The PPA model has proven highly successful on a global basis. And specifically in Australia, the commercial PPA market has a strong potential to grow and deepen,’ says Oliver Yates, CEO of CEFC. ‘We see the ET Solar commercial PPA model as a way to remove the barrier of the upfront capital requirement, which should enable many more Australian businesses to benefit from the lower-cost and environment-friendly solar energy.’
ET Solar has a pilot commercial PPA project already in execution in Queensland, Australia, with a number of other similar projects being developed in the country.