BNP Paribas coordinates green loan to finance Queensland’s largest battery storage system

BNP Paribas today announced the closure of a green loan to support the delivery of Vena Energy’s $120 million Wandoan South battery project in Australia, the first project financing of a Battery Energy Storage System (BESS) in the Asia Pacific region. As battery storage becomes commercially bankable, it is expected to accelerate the penetration of renewable energy and the energy transition in Australia.

The move signals a major shift in the types of financing available for much-needed battery storage projects in Australia and could pave the way for future collaboration between energy market players. With an offtake agreement already in place with AGL Energy, Vena Energy’s Wandoan South BESS is one of the largest utility scale battery projects currently being developed in Australia and the largest in Queensland. Upon completion, it is expected to be capable of discharging up to 100 megawatts (MW) and storing 150 megawatt hours (MWh) of energy, equivalent to powering up to 57,000 Australian homes.

“We believe project finance could become increasingly important in the delivery of battery projects across Australia. The cooperation between AGL Energy as the offtaker and Vena Energy as the integrated developer, owner and maintainer has meant that banks have more confidence around future cashflows from this project, allowing us to take a more direct role in speeding up the energy transition,” said Karine Delvallée, Head of Territory Australia and New Zealand.

BNP Paribas acted as the sole Green Loan coordinator for this project finance facility. The Wandoan South BESS is the first battery energy storage system to be financed on a non-recourse basis in Asia Pacific, and meets the criteria of ‘Green Financing’ as aligned with the Green Loan Principles[1]. BNP Paribas will support the financing of the battery from development to operation, and has also been appointed Account Bank, Agency and Security Trustee.

[1] The Green Loan Principles were introduced by the Loan Market Association and Asia Pacific Loan Market Association in March 2018.