Australia’s renewable energy company MPower (ASX: MPR) has continued to accelerate growth, with them announcing that they’ve entered a Share Purchase Agreement with Kawa Australia Developments Pty Ltd to acquire the Lakeland Solar & Storage Project which is located in Cooktown Shire, North Queensland. 

The transaction will be worth $8m – with the Project expected to generate annual revenue from the sale of energy of approximately $1.8m and annual EBITDA of more than $800k. 

“The acquisition of the Lakeland project is an exciting opportunity for MPower that accelerates and expands our BOO strategy. It provides us with an established, operating hybrid renewable energy asset that will increase the Company’s revenues from day one, adding more than $800k to EBITDA per year. We intend to immediately deploy our expertise to upgrade the Project and enhance its value,” said MPower CEO, Nathan Wise.

The Project has been in operation since 2017 and benefits from a purchase agreement with Origin energy until 2030 for 100% of the Project’s energy output. The acquisition will see MPower implement its in-house engineering team to deliver immediate operational improvements, including upgrades to the Projects infrastructure. The Company will start taking control of operations, maintenance and asset management of the Project. 

The acquisition delivers MPower a proven operating asset and accelerates the Company’s Build Own Operate (BOO) strategy to include immediate energy storage infrastructure and a solar grid energy asset.

The Lakeland Project is strategically aligned to MPower’s portfolio and fast tracks the Company’s plans to own and operate a distributed portfolio of Australian renewable energy assets. This opportunity will also expand MPower’s geographic footprint, adding Queensland to the Company’s existing development projects in New South Wales, Victoria and South Australia.

The Project further enhances the Company’s capability to own and manage assets in the burgeoning battery storage sector. Over that past year, lithium prices have risen over 400%. This positions the Company very well within the battery sector – in 2020, the overall investment in battery storage increased 40%, to US$5.5bn with a total of 17GW of storage capacity globally. The United States and China are several of the major nations investing heavily into the sector as the world aims to be net zero emissions by 2050. With new policies and projects to accelerate growth, to achieve this target, there will need to be a total of 600GW of storage capacity installed.

During the previous quarter, the Company made substantial progress establishing its BOO portfolio of 20, 5MW renewable energy projects with an estimated end value of $150m+. By the end of the quarter MPower had a cash balance of $1.3m, with cash receipts from operating activities at $984k, of which $904k went to staff costs.