Australian sovereign wealth fund to invest $863m in Tasmanian grid infrastructure
Australia’s Clean Energy Finance Corporation – a green sovereign wealth fund – has announced a new grid infrastructure investment. Nearly $863m (A$1.2bn) has been allocated from the Rewiring the Nation Fund, an investment vehicle targeted clean energy grid infrastructure.
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The investment will support Tasmanian electricity operator TranNetworks in delivering stage one of the North West Transmission Developments (NWTD) project. The utility will use the funds to upgrade over 130km of transmission infrastructure to improve renewables integration.
“Our ability to provide long-term concessional finance, alongside the Tasmanian Government, lowers the overall cost of capital, and delivers an estimated A$315 million in benefits to Tasmanian electricity consumers in the first five years”, commented CEFC chief executive Ian Learmont.
TasNetworks char Roger Gill says the sovereign wealth fund’s financing has a funding structure which commercial financing would struggle to deliver.
“The CEFC finance is fundamental to delivering this infrastructure in a way that would not have been possible through commercial financing alone. Their investment provides a prudent funding structure that supports long‑term network investment in the state while protecting customers from increased cost pressures”, Gill explains.
The NWTD is part of Project Marinus – a grid connectivity system connecting Tasmania to Australia’s national grid. Tasmania is located 240km to the south of Australia’s mainland.
Marinus Link, the undersea and underground cable network, is aimed at two-way connectivity between Tasmania’s hydroelectricity capacity and the mainland’s surplus solar power.
“Linking Tasmania's hydro resources with mainland demand helps move renewable energy where it's needed most, boosting grid reliability and supporting the clean energy transition, and contributes to strengthening system resilience across the national market”, CEFC’s Learmonth adds.
Stage one of the Marinus Link is expected to enter construction this year. CEFC’s latest investment, marks the completion of financing for the project.
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