MREH closes A$400m Australian BESS debt financing

February 14, 2024

Melbourne Renewable Energy Hub (MREH) has closed what it describes as the “largest non-recourse debt financing package for an Australian grid-scale battery energy storage system”, raising A$400m from a debt syndicate comprising Export Development Canada, Societe Generale, Standard Chartered, and Westpac (MREH Debt Financing) for a 200MW / 800MWh battery storage project.

MREH is co-owned by Equis Australia and Victorian government-owned renewable energy company SEC.

“This is a landmark debt transaction as the first financial close of a four-hour BESS in Australia’s National Electricity Market (NEM),” a MREH statement said.

The debt financing will fund the construction of the MREH 3 project, which the SEC will be responsible for operating.

MREH 3 is one of three MREH projects – each of which has a capacity of 200MW.

Once complete, the MREH projects will provide 1.6GWh of energy storage, enough to power up to 200,000 homes during peak periods. MREH is expected to be completed in 2025.

“The SEC’s participation has been critical for the success of the MREH project, having been the catalyst for it to start construction and enabled the project to expand from a 2-hour to 4-hour storage capacity,” the statement added.

David Russell, co-founder and managing director of Equis, said: “We have found the equity partnership model to be a very effective vehicle for government industry collaboration to bring forward renewable energy projects. We think this model should be considered by other state governments because it allows their investments to earn sustainable returns that can be reinvested in further renewable energy initiatives.”