Herbert Smith Freehills has advised a syndicate of lenders on the project financing of Eku Energy’s 250MW / 500MWh Big Canberra Battery energy storage system, which will be located in Williamsdale in the ACT (the Project).

MUFG Bank, Ltd, Sumitomo Mitsui Banking Corporation, and Westpac Banking Corporation have provided project financing to the Project. Moulis Legal acted as ACT counsel for the lenders.

The Project has been developed by Eku Energy and will be supported by a 15-year innovative revenue swap arrangement with the Australian Capital Territory Government. Under the arrangement, Eku Energy will provide the ACT Government with a share of revenue from the Project’s participation in the National Electricity Market in exchange for fixed quarterly payments over a 15-year period to help lower the cost of capital. The ACT Government has also agreed to lease the land for the Project under this arrangement.

The battery technology is to be supplied by Tesla, and balance of plant provided by Consolidated Power Projects. Evoenergy will provide connection services for the Project.

The cross-practice Herbert Smith Freehills team was led by partner Elizabeth Charlesworth, with support from partners Alison Dodd, Neena Aynsley, Peter Davis, and Peter Briggs. They were supported by executive counsel Gabby Herron-Cartwright and Rebecca Davie, senior associates Stuart Robertson and Michael Trent, solicitors Cecilia Mak, Stephanie Simm, Sarah-Anne Butler, Ben Fong, Georgie Juszczyk, and Holly McNaughton, and graduates Grace Kim and Lewis McNamara.

Herbert Smith Freehills partner Elizabeth Charlesworth said, “With the expanding rollout of variable renewable energy assets, the need for grid stability and reliability continues to increase. This project demonstrates Eku Energy’s commitment to combatting these challenges faced by market participants and working towards a greener and more stable grid for the Australian Capital Territory.

“The revenue share arrangement provided by the ACT Government has been an important feature of the Project for lenders and demonstrates the potential for innovative solutions to further accelerate the clean energy transition”.

This deal is another example of Herbert Smith Freehills’ market-leading work in the clean energy sector. Other recent examples include our firm advising:

• A syndicate of seven commercial lenders on the greenfield development, and portfolio financing of Akaysha’s BESS projects: Ulinda Park (150MW/300MWh) and Brendale (205MW/410/MWh), both located in Queensland
• The lenders on the development and project financing of the 200MW/400MWh Rangebank Battery Energy Storage Systems, located in Cranbourne West, Melbourne, Victoria
• Edify Energy on the development and project financing of the 185MW/370MWh Koorangie Battery Energy Storage System, located in Northwest Victoria
• Genex Power in relation to the financing of the Bouldercombe BESS project to be located in Bouldercombe, Central Queensland

Ashurst advised the borrower. KWM advised the Australian Capital Territory. ICA Partners acted as financial adviser to Eku Energy.