Carnegie obtains financing for Garden Island Microgrid project

Carnegie Wave Energy Limited has announced that it has signed a AUD3.69 million (US$2.81 million) Debt Financing Agreement to support the world’s first solar, battery and wave integrated microgrid project in Australia.

This agreement follows the recently announced AUD2.5 million (US$1.9 million) of funding from the Australian Renewable Energy Agency (ARENA) with the balance of funding to be provided by Carnegie equity

The project will involve the construction and installation of a 2MW solar PV array, a 2MW/0.5MWh battery energy storage system and control system both to be integrated with Carnegie’s CETO 6 wave energy generation technology. The project will also include augmentation of the grid connection and is supported by Western Power, the network operator who builds, maintains and operates the main electricity network in Western Australia.

The project will begin construction before the end of 2016 and be commissioned in the first half of 2017. Designed to operate in “on-grid” mode in parallel with the Western Australian electricity network and in “islanded” mode, isolated from the grid, this project will act as a template for remote islands and fringe of grid communities globally.

To enable the signing of the new Debt Finance Agreement, Carnegie’s existing AUD21 million (US$16 million) undrawn senior secured debt facility with the Commonwealth Bank of Australia (CBA) has been placed on standby and Carnegie’s existing convertible note facility has been cancelled and replaced. The cancelled convertible notes, worth AUD3.69 million, were subordinated secured debt with 0% coupon which could be converted to ordinary shares in Carnegie at a conversion price of AUD0.042 per share. The new AUD3.69m convertible note, is senior secured debt and will be used to finance the construction and commissioning of the AUD7.5m Garden Island Microgrid Project. The new convertible notes have an 8% p.a. coupon and can be converted to ordinary shares in Carnegie at anytime by the noteholders at a conversion price of AUD0.038 per share.

Carnegie’s Chief Financial Officer, Aidan Flynn said:

“Not only will the Garden Island Microgrid Project be the first time anywhere in the world that wave energy will be combined with solar and batteries in a microgrid configuration, but it will also be the first time such a project has received debt finance. Signing of the Debt Financing Agreement for a project of this scale is financial validation for us that Carnegie’s microgrid diversification strategy is a clear path to commercialisation.”

“The unique combination of renewable technologies and battery storage in a microgrid demonstrates the model we will roll out to island nations around the world. It is a significant commercial opportunity for Carnegie. The global market in microgrids is expected to grow to US$40bn by 2020.”