Carnegie Wave Energy has signed a Au$3.7 million ($2.8 million) debt financing agreement to support the Garden Island solar, battery and wave integrated microgrid project.
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 technology and existing desalination plant.
It 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.
Aidan Flynn, Carnegie’s Chief Financial Officer, said: “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 commercialization. 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 $40 billion by 2020.”
Carnegie said the construction of the project will begin before the end of 2016, and the commissioning is expected in the first half of 2017.
The project is designed to operate in ‘on-grid’ mode in parallel with the Western Australian electricity network and in ‘islanded’ mode, isolated from the grid, and will act as a template for remote islands and fringe of grid communities globally, Carnegie states.
In addition to this Au$3.7 million debt financing facility, the project is also supported by Au$2.5 million from ARENA.
To enable the signing of the new debt finance agreement, Carnegie’s existing Au$21 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, Carnegie informed.
The new Au$3.7 million convertible note 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 $0.038 per share.
The convertible notes will mature on November 17, 2017 with an option for the noteholders to extend by 12 months on the same terms, according to Carnegie.