The 100 MW Numurkah Solar Farm in Victoria’s Goulburn Valley region has reached financial close and is ready to begin construction within days, which according to French developer Neoen will create up to 300 jobs for the local economy.

Even before work has begun on the project, Neoen has secured major power supply contracts: a 38 MW Green Certificate Purchase Agreement with the Victorian Government towards the Melbourne tram network, and a 15-year PPA with SIMEC ZEN, the Australian energy arm of Sanjeev Gupta’s GFG Alliance, which was signed in the presence of French President Emmanuel Macron and Australian Prime Minister Malcolm Turnbull in May.

SIMEC ZEN Energy will use the energy to support firm retail supply contracts to commercial and industrial customers in Victoria, including the Melbourne-based Laverton steelworks – another turn to solar to reduce power costs in the steel industry adding to the largest solar PPA in Australia inked by Bluescope Steel a week ago to cover 20% of its electricity requirements.

“In steel making, energy can account for between 20 to 40% of input costs. It makes good economic sense to find a renewable energy resource that can reduce those outlays,” said CEFC transaction lead Monique Miller, adding that the the CEFC expects to see further demand for solar as energy intensive manufacturers seek corporate power purchase agreements to offset their energy costs.

The project’s cost of around $198 million has been covered by French developer Neoen, the Australian government’s Clean Energy Finance Corporation (CEFC) with $56 million in debt finance, clients managed by Vantage Infrastructure, an independent specialist investment manager, as well as German Landesbank NORD/LB.

“High grid electricity prices, high gas prices and unfavorable contracting conditions have put pressure on tight operating margins for manufacturers,” said CEFC CEO Ian Learmonth.

“The lower cost of solar, combined with these types of commercial power purchase agreements, offer manufacturers welcome control over their energy use,“ he underlined, adding that the Numurkah-Laverton contract is an outstanding example of how reducing the electricity bills and carbon emissions of energy-intensive industries such as steel manufacturing is increasingly achievable.

Announcing the financial close, Neoen said the project is a significant milestone for the company, which now owns and operates or is building 1 GW of assets in Australia, including the Tesla big battery in South Australia.

“Numurkah is an important project for Neoen“, said Franck Woitiez, Managing Director of Neoen Australia.

“First, because it marks the achievement of our first gigawatt of projects in Australia, either under construction or in operation. Second, because the Victorian Government and ZEN Energy are long-term partners for Neoen and this project proves that collectively, we are moving towards our aim of delivering sustainable, reliable and competitive energy to all Australians,” he explained.

The first panels will be installed in October, with Downer EDI handling the EPC duties on the project.

Commercial operation is pencilled in to begin next May, and Neoen expects the Numurkah Solar Farmwith will generate 255 GWh of clean energy into the national power grid each year.