The AUD 7bn (USD 4.5bn) project financing of the Central-West Orana Renewable Energy Zone (CWO REZ) electricity network is on track to reach financial close next month, two sources said.

Allocations are not yet complete but banks are fully committed to tenors of six, seven and eight years, one of them added.

Infralogic reported in January 2024 that the ACEREZ consortium had lined up a group of around 20 lenders to finance the grid infrastructure, including: Australia and New Zealand Banking Group, Bank of China, BNP Paribas, China Construction Bank, Crédit Industriel et Commercial, DBS, Deutsche Bank, Industrial and Commercial Bank of China, Mizuho, Nissay insurance, The Norinchukin Bank, Santander, Sumitomo Mitsui Banking Corporation, Standard Chartered and Westpac.

The bank group and the size of the facility remains largely unchanged, the sources said.

At the time, sources were predicting that the project would reach financial close in the second half of 2024.

Last May, the Clean Energy Finance Corp., the federal government’s green bank, said that it would lend AUD 490m into the Central-West Orana financing from the Rewiring the Nation fund – its largest commitment to date.

ACEREZ was chosen by New South Wales state government body EnergyCo in April 2023 to design, finance, construct, own and operate the transmission line following a competitive tender, but EnergyCo only awarded ACEREZ a transmission licence in September 2024.

ACEREZ consists of Acciona Concesiones, Cobra and Macquarie-owned Endeavour Energy, with Capella Capital advising the consortium.

EnergyCo has steadily increased the amount of generation that could be connected to the grid in the REZ.

Originally, the state predicted that there would be 3 GW of generation connected to the new network, but that was increased to 6 GW. In January, the state added another 1.7GW, noting that the grid was capable of bearing 4.5 GW but not all of the renewables projects and storage projects will be sending power to the grid at the same time.

Central-West OranaREZ is the first of New South Wales’ five planned renewable energy transmission lines and is the first competitively procured with the network operator bearing most of the delay and cost overrun risks.

The project’s structure combines features of public-private-partnerships and regulated asset models and will connect renewable energy projects in the REZ to existing load centres in Newcastle, Sydney and Wollongong.

ACEREZ has three entities: a network operator, a design and construct joint venture between ACCIONA and COBRA, and a maintenance and lifecycle contractor to maintain the transmission network, according to ACEREZ’s website.

The transmission line is expected to be operational by 2028 and consist of 90km of 500kV overhead transmission lines and 150 km of 330kV transmission lines for generator connections, ACEREZ’s website states.

An EnergyCo spokesperson told Infralogic via email that it expects to reach financial close on Central-West Orana early this year.