Herbert Smith Freehills has advised the Clean Energy Finance Corporation (CEFC) on a A$20 million five year loan facility to Carnegie Wave Energy Limited (Carnegie) to develop and implement its patented CETO wave energy technology.

Carnegie is listed on the Australian Stock Exchange and is the inventor, owner and developer of a fully-submerged wave energy technology which will convert ocean swell into zero-emission renewable power and can also be used for desalination of seawater. A CETO wave energy project is currently being installed in Western Australia (the CETO 5 project), and the CEFC facility will partially fund the next project, CETO 6.

The financing structure implemented in this transaction has been developed to allow CEFC to exercise a number of key 'project finance' style controls and security rights , while also allowing flexibility for Carnegie to develop the next project implementing the CETO technology ahead of full maturity and commercialisation. This financing structure is intended to be able to be utilised by CEFC in future transactions.  

The Herbert Smith Freehills team was led by partner Joel Rennie, who was supported by senior associate Amelia Fleming and solicitor Rupert Baker.

“We are delighted to work closely again with CEFC, on its first wave energy financing with Carnegie Wave Energy Limited, implementing a unique financing structure,” said Joel Rennie.

This deal is yet another example of the strong work of Herbert Smith Freehills’ Energy Team, who previously acted for:

•     the sponsors or financiers of over 75% of the wind farms to achieve financial close in Australia to date
•     the sponsor or financiers on every wind farm to achieve financial close in Australia in the last 4 years
•     the developer of the first commercial scale solar project in Australia
•     the majority of the bidders, contractors and financiers supporting bidders for the Commonwealth Solar Flagship Funding Program.

Bellanhouse Legal advised Carnegie on this transaction.