Carnegie Wave Energy has signed an A$3.69 million debt financing agreement to support its Garden Island Microgrid Project, which will involve integrating a 2-MW solar PV array and a 2-MW battery energy storage system with the company’s CETO wave energy technology.
This agreement follows a recent announcement of A$2.5 million (US$1.9 million) in funding received from the Australian Renewable Energy Agency for this project.
The project also will include augmentation of the grid connection and is supported by electricity network operator Western Power, according to a press release.
“Not only will the Garden Island Microgrid Project be the first time anywhere in the world that wave energy will be combined with solar and batteries in a microgrid configuration, but it will also be the first time such a project has received debt finance,” said Carnegie Chief Financial Officer Aidan Flynn. “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.”
Construction on the project is expected to begin before the end of 2016, and it should be commissioned in the first half of 2017. It is designed to operate in “on-grid” mode in parallel with the Western Australian electricity network.
Specific details of the new agreement are, according to a Carnegie press release: To enable the signing of the new Debt Finance Agreement, Carnegie’s existing $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. The cancelled convertible notes, worth $3.69 million, were subordinated secured debt with 0% coupon which could be converted to ordinary shares in Carnegie at a conversion price of $0.042 per share. The new $3.69 million convertible note, is senior secured debt and will be used to finance the construction and commissioning of the $7.5 million Garden Island Microgrid Project. The new convertible notes have an 8% p.a. coupon and can be converted to ordinary shares in Carnegie at any time by the noteholders at a conversion price of $0.038 per share. The convertible notes will mature on 17 November 2017 with an option for the noteholders to extend by 12 months on the same terms.
Carnegie’s CETO system operates under water and converts ocean wave energy into electricity and desalinated water.