US$475 million waste-to-energy project in Australia reaches financial close

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DIF has announced that it has achieved financial close of a AUD668 million (US$476.1 million) greenfield waste-to-energy facility in Kwinana, near Perth, Australia, in consortium with Macquarie Capital and Phoenix Energy Australia. DIF has acquired a 60% shareholding in the project through two of its funds: DIF Infrastructure IV and DIF Infrastructure V.

Once operational the facility will divert up to 400,000 metrics tons of household, commercial, and industrial waste from landfills each year, representing a quarter of Perth’s post-recycling rubbish. The facility will benefit from long-term municipal waste supply agreements with Rivers Regional Council and the City of Kwinana, two regional councils located in the Perth region.

Collected waste will undergo thermal treatment, whereby the recovered energy is converted into steam to produce electricity. It is projected that the facility will export 36 MW of electricity to the local grid per year, sufficient to power more than 50,000 households.

Metallic materials will be recovered and recycled, while other by-products of the process will be reused as construction materials. At full capacity, the facility will reduce carbon dioxide emissions by more than 200,000 metric tons per year, the equivalent of taking 43,000 cars off the road.

Macquarie Capital and DIF are providing AUD275 million (US$196.0 million) of equity finance, and Macquarie Capital will also continue to be responsible for delivery of the facility.  The developers have secured AUD400 million (US$285.1 million) debt financing. AUD90 million (US$64.1 million) is being provided by the Australian government's Clean Energy Finance Corporation (CEFC).

The project is also supported by a grant from the Australian Renewable Energy Agency (ARENA) of AUD23 million (US$16.4 million).

Acciona has been contracted to design and construct the facility, while Veolia has signed a 25-year operations and maintenance agreement. Construction will commence this month, while start of operations is planned for the end of 2021.