Innovative green finance to power Broadway site
Four thousand future residents of the Central Park development being built by Frasers Property and Sekisui House on the former Carlton & United Breweries (CUB) site will be supplied with low-carbon thermal energy under an innovative new green finance agreement signed with the City of Sydney.
The City of Sydney, Eureka Funds Management and Frasers Property have signed the historic $26.5 million Environmental Upgrade Agreement (EUA) to install a highly-efficient, gas-powered trigeneration plant that aims to slash carbon emissions at the Broadway development.
Lord Mayor Clover Moore said buildings were responsible for almost a quarter of Australia’s greenhouse emissions, and one of the most promising places to start cutting those emissions.
“It’s good to see Frasers take advantage of the smart, cheap financing now available to pay for new technologies that can dramatically reduce carbon emissions,” the Lord Mayor said.
“This is the first environmental upgrade agreement the City has signed, but hopefully we will soon be part of many more of these voluntary agreements, delivering great results for business and for the community.”
Frasers will use the EUA funding to install two-megawatts (MW) of trigeneration capacity, running on natural gas and producing low-carbon thermal energy, and providing heating and cooling for 3,000 residences and 65,000sqm of retail and commercial space in 14 buildings at Central Park.
The stage one trigeneration energy centre will also supply low-carbon electricity to the multi-storey Clare Hotel and the mixed-use Brewery Yard building.
An EUA is a voluntary agreement between a building owner, a finance provider and a local council, made possible by changes to the Local Government Act in 2011 to encourage building upgrades.
Under these agreements, the financier provides the building owner funds for the upgrade and is repaid by a charge on the land called an Environmental Upgrade Charge (EUC).
The council issues an EUC to the building owner each quarter when it sends out its rate notices and forwards the money it receives to the financier.
Work on the new trigeneration energy system is now underway and will be completed and commissioned by December. The plant will be housed in a multi-level subterranean bunker, which is part of the existing heritage Brewery Yard building.
Environmental consultants WSP Group calculate that Central Park’s two mega watt plant could reduce greenhouse gas emissions by 190,000 tonnes over the 25 year design life of the plant. This has the same effect on combating greenhouse gas emissions as removing 2,500 cars from our roads every year for 25 years.
CEO of Frasers Property Australia, Guy Pahor, said: “We are delighted to work with the City of Sydney to take this first step into a greener future for Sydney.
“In this way, Central Park will act as a model of environmental standards for future large-scale mixed-use urban regeneration projects”.
Finance for Frasers’ EUA will be provided through The Australian Environmental Upgrade Fund (TAEUF 2) established by Eureka Funds Management Limited (Eureka), the Australia and New Zealand Banking Group (ANZ) Limited, and Australian Government backed independent company Low Carbon Australia Limited (LCAL). Eureka is the Trustee of TAEUF 2 which finances energy efficiency projects.
CEO of Low Carbon Australia, Meg McDonald, said: “This project demonstrates the power of a new finance solution to help create urban transformation and low carbon innovation at scale.”
Niall McCarthy, Director of Eureka, said: “This unique funding mechanism is a first for funding precinct trigeneration projects, and Eureka has sufficient capital to finance similar opportunities in the future.”
ANZ, Global Head of Commercial Property, Eddie Law said: “ANZ is pleased to have played a role in pioneering Australia’s environmental finance market through this innovative agreement and we will continue to consider other opportunities involving Environmental Upgrade Agreements in the future”.
The EUAs are part of the City’s commitment to reduce carbon emissions across the LGA by 70 per cent by 2030, based on 2006 levels – one of the most ambitious targets of any Australian government. The City’s EUA program is being partly funded by the NSW Office of Environment and Heritage.
The City has signed a development agreement with Cogent Energy, fully owned by Origin Energy, to design, build, operate and jointly finance the City’s proposed precinct or district trigeneration networks to supply council and privately-owned buildings across central Sydney.
The district trigeneration networks will reduce greenhouse gas emissions from connected buildings by 40 to 60 per cent compared to coal-fired power.
For more information contact:
City of Sydney Senior Media Adviser Jon Walter, phone 02 9265 9753, 0406 868 359 or email firstname.lastname@example.org
For interviews with Lord Mayor Clover Moore, contact:
Matt Levinson 0427 044 768 or email@example.com
For interviews with Frasers Property CEO Guy Pahor, contact:
Libby Conway, The Capital Group, 0439 076 835 or firstname.lastname@example.org