Frontier Energy Secures Funding for Largest Solar-Battery Hybrid in WA
Frontier Energy, based in Perth, has announced the green light for the early works and construction of Western Australia’s largest solar and battery hybrid, following the acquisition of a complete funding package for the ambitious venture.
The company disclosed on Friday that it secured credit-approved commitments for project finance debt facilities totalling around A$280 million, which includes a construction facility of approximately A$250 million to further the development of the Waroona Renewable Energy Project.
Project Details and Approvals
After several attempts and varying proposals, Waroona has finally received the necessary approvals from both state and federal authorities to commence phase one. This initial phase comprises a solar farm with a capacity of 132 megawatts (MW), alongside an integrated 81.5 MW battery energy storage system capable of delivering 6.9 hours of storage, or 565 MWh, situated on freehold land roughly 120 km south of Perth.
The solar capacity was recently expanded owing to an increase in module capacity from 610 watts to 660 watts from the preferred panel supplier. Additionally, the battery’s storage has been enhanced by an extra two hours to meet the capacity credits requirements that form the basis of the facility’s business model.
Funding Progress and Construction Plans
As an ASX-listed entity, Frontier Energy revealed last month that it had secured agreements for an injection of A$110 million in equity, which would represent nearly one-third of the project’s total cost, pending shareholder approval and the acquisition of additional funding to cover the complete A$310 million and an additional A$17 million for contingencies.
The company entered a trading halt on Wednesday but confirmed on Friday that it has successfully established a funding package that will facilitate the timely development of stage one of Waroona.
This package comprises a credit approved underwriting letter with global banking giants Natixis and Sumitomo Mitsui Banking Corporation (SMBC), which fully support a construction and term facility of up to A$250 million, alongside a A$13 million bank guarantee facility and a A$17 million debt service reserve facility.
Project Milestones
The ASX statement indicated that the receipt of credit approved commitments satisfies the final major condition of the A$110 million conditional placement, with shareholder approval granted at the general meeting on 10 July 2026 and the settlement scheduled for 21 July 2026.
Frontier aims to initiate construction-related works on Waroona immediately after receiving the equity proceeds. “The debt facilities reinforce the technical and commercial viability of the project, illustrating robust backing from institutional infrastructure lenders and positioning the project for construction to commence,” the statement added.
The company will now move forward with finalising binding facility agreements, meeting conditions precedent, advancing equity funding, and achieving financial investment decision (FID) and financial closure, with guidance from Azure Capital and legal expertise from Clayton Utz.
Leadership Statements and Future Prospects
“Today is a significant milestone for Frontier and the Waroona Renewable Energy Project,” said executive chair Jamie Cullen on Friday. “With the fully underwritten debt package, we are delighted to have delivered a complete funding package that will ensure the timely development of the project.”
Cullen further noted, “Our team, along with Monford, our lead contractor, is prepared to initiate early works and construction immediately upon the settlement of the A$110 million conditional placement. The support from tier 1 infrastructure lenders is a strong endorsement of our project, and we look forward to fostering lasting relationships with Natixis and SMBC as we advance Stage One and pursue our broader growth ambitions.”
As reported by Renew Economy, Frontier anticipates that Waroona will generate “base case” revenue of approximately A$72.5 million from the initial stage. This includes A$32 million from its reserve capacity contracts with the Australian Energy Market Operator.
The remaining A$40.5 million is expected to arise from energy sales, frequency control services, and large-scale generation certificates (LGC). The company has indicated that the majority of this revenue will likely come from selling excess output from its battery and solar installation.
Long-term Vision
The project is also backed by an underwriting agreement under the federal government’s Capacity Investment Scheme, which serves as a safety net if other sales revenues dip below specific thresholds, although the amount remains unspecified.
Subtracting A$10 million in operating expenses—with an estimated A$3 million from battery charging—Frontier expects operating earnings (EBITDA) of A$62.5 million, alongside free cash flow of A$32 million after servicing debt and tax payments.
Looking ahead, there are plans to add a further second, third, and fourth stages, eventually expanding the project to around 1,000 MW with up to 660 MW of battery capacity.
“Our strong backing from existing investors and the interest from new investors underscores the quality of our Stage One project, along with the potential for further development at Waroona to establish a significant renewable energy hub in South West WA,” Cullen remarked.
