MPower accelerates renewables strategy with Lakeland acquisition

Sydney-based MPower said on Monday it had entered into a share purchase agreement with Kawa Australia Developments to acquire 100% of Lakeland Solar & Storage, the owner of the 10.8MW Lakeland solar farm and 1.4MW/5.3MWh lithium-ion battery storage facility located on the Cape York Peninsula in Queensland’s far north.

The project, spread across 45 hectares near Cooktown, about 240 kilometres north-west of Cairns, has been operating since 2017. Touted as “Australia’s first large scale solar-plus-storage array”, the project has a power purchase agreement for 100% of output in place until 2030 with Origin Energy. The project has an expected remaining operating life of approximately 20 years.

MPower said the Lakeland transaction is valued at $8 million, comprising deferred consideration of up to $350,000 over a three-year period following completion and the assumption of an existing $7.66 million debt facility in place with German bank NORD/LB. MPower said the equity required for the transaction will be internally funded.

The acquisition remains subject to a number of conditions, including third party consents and the finalisation of amendments to the existing debt facility structure but MPower expects the transaction to be completed by the end of June.

MPower, which will take responsibility for the operations, maintenance and asset management of the Lakelands facility upon completion of the transaction, said the Lakeland solar farm and storage facility is expected to generate annual revenue from the sale of energy and large-scale generation certificates (LGCs) of approximately $1.8 million and annual earnings before interest, tax, depreciation and amortisation (EBITDA) of more than $800,000.

MPower chief executive officer Nathan Wise said the purchase of the project is strategically aligned to the company’s portfolio and fast tracks its plans to own and operate a portfolio of Australian renewable energy assets.

“The acquisition of the Lakeland project is an exciting opportunity for MPower that accelerates and expands our BOO (build, own and operate) strategy,” he said. “It provides us with an established, operating hybrid renewable energy asset that will increase the company’s revenues from day one.

“We intend to immediately deploy our expertise to upgrade the project and enhance its value.”

MPower, which has a history of designing, constructing, commissioning and maintaining solar farms, said it will look to deliver immediate operational improvements, including upgrades to infrastructure and implementation of its proprietary solution for the remote control and monitoring of renewable energy projects.

Wise said the project’s lithium-ion battery storage capacity further enhances MPower’s capability to own and manage assets in the battery energy storage sector. The project also expands the company’s geographic footprint, adding Queensland to the company’s existing development projects in New South Wales, Victoria and South Australia.

“This significant transaction lays a solid foundation for us to now accelerate the build-out of our BOO portfolio which is progressing very well,” he said. “A number of significant steps forward are imminent. Furthermore, we continue to assess other underperforming renewable assets that might form part of our BOO portfolio and where we can improve asset performance.”