Clean Energy Finance Corporation finance for Victoria’s largest solar farm will help bring stability and diversity to the state’s energy supply, demonstrating solar’s increasing cost competitiveness, while supporting a low emissions transport future.

Construction is about to begin on the 88MW (AC) 110MW (DC) Bannerton Solar Park, at Almas Almonds in Victoria’s Sunraysia district, following confirmation that the CEFC is committing about $98 million in debt finance towards the project.

CEFC CEO Ian Learmonth said the CEFC had invested as the sole debt financier to accelerate the project which, due to the rapidly falling cost of constructing solar in Australia, is being developed without any grant support.

“Previously it wasn’t viable to construct solar of this scale in Victoria, which has good insolation rates but not as high as the northern states. We have witnessed rapidly improving economic conditions that now make this project commercially viable without the need for grant funding,” Learmonth said.

“What’s more, through the recent agreement struck with the Victorian Government, Bannerton Solar Park will effectively help power Melbourne’s iconic tram network, reducing the city’s public transport emissions, making an important contribution to decarbonisation of the economy.”

The project is being developed by a joint venture between independent global infrastructure and private equity investment manager Foresight Group and Syncline Energy, a Victoria-based developer.

Equity investment in the project will be provided by the UK-listed Foresight Solar Fund Limited (FSFL), Korean government-owned Korean Infrastructure Asset Management Company KIAMCO (each of whom are taking a 48.5% stake) and Korea’s Hanwha Energy (3%).

Syncline Energy spokesperson Phil Galloway said the project was being built on almond orchard land that isn’t suitable for planting. The almond farm benefits from leasing the land around its orchards, generating an additional revenue stream for its business.

Construction is expected to involve around 180 jobs and is targeting a connection date of July 2018.

The 320,000-panel plant is expected to generate enough power to supply around 30,000 homes with solar energy, and a significant proportion of its projected output has been contracted in separate agreements with Alinta Energy and the Victorian Government.

The Bannerton project is helping build diversity in Victoria’s evolving renewable energy mix, as the state embraces renewable energy alternatives to replace its aging coal-fired generators.

It will see the construction of new powerlines to connect the solar farm to the grid. The project’s inverters, which convert the solar DC electricity to AC electricity for export to the network, will also help provide voltage support on the grid, so the project meets AEMO’s continuous uninterrupted operations requirements in the event of grid faults.

Bannerton is the CEFC’s second investment in a solar farm in Victoria. In March this year, the CEFC announced its first solar farm in Victoria, committing finance to Edify Energy’s 50MW (AC) Gannawarra Solar Farm, west of Kerang. Earlier, the CEFC also committed $67 million in senior debt financing to the Ararat Wind Farm, as well as $73 million to finance the final stage of the Portland Wind Farm in south west Victoria.