Project finance remains foundational, providing capital discipline and effective risk allocation, but it is no longer sufficient to deliver the flexibility and depth of capital required. As developers seek to recycle capital more rapidly and move beyond the traditional ‘contracted revenue’ bankability box, financing must shift from single-asset deals toward multi-layered, platform-based structures designed for scale and access to capital markets.
Key takeaways
Platform-based financing is becoming the dominant model: capital is now being deployed at platform level, allowing for more flexible structures, reduced transaction costs and faster deployment.
New instruments are reshaping early-stage funding: Devex facilities, structured equity and HoldCo mezzanine structures are filling the gap between development and construction, offering developers more flexibility and scale.
Scale is driving joint ventures: larger projects require pooled equity, deep expertise and shared risk to deliver bankable, fast-to-market outcomes.
Capital markets are coming – but only for bankable platforms: debt capital markets will unlock long-term capital, but only for developers with the scale and structure required to meet institutional requirements.
Platformisation is reshaping the capital stack
Australia is shifting rapidly toward portfolio-based financing. Over the past 18 months, the market has seen a wave of portfolio financings including transactions by FRV, GPG, ACEN and HMC Capital, with more in the pipeline. These structures act as growth platforms, enabling developers to aggregate multiple in-construction and operational assets under a single financing framework. The result is scalable expansion, lower costs of capital and better risk pooling. This trend will continue to accelerate over the next 12 to 24 months as international players introduce aggressive corporate-style terms into the Australian market that push the market beyond the traditional ‘contracted revenue’ bankability box.
Key features of the portfolio model include:
New assets: unlike the traditional portfolio model (that was static), the new financings operate as ‘growth platforms’ enabling new operational or development-stage assets to be added subject to meeting pre-defined eligibility criteria.
Excluded subsidiaries: sponsors can debt size against an agreed threshold of excluded subsidiaries (in other words subsidiaries, such as joint ventures which are not obligors or security providers). Lenders treat these positions as Holdco loans, structurally subordinated to any senior portfolio finance debt, and size exposure based only on forecast distributions, not the underlying project cash flows.
Debt sizing: platform structures support higher gearing, lower pricing and greater merchant exposure, though scrutiny increases for greenfield, partially owned or high-risk assets.
Incremental debt: sponsors can raise additional debt for refinancing, acquisitions or re-gearing, usually through permitted debt regimes, subject to due diligence and credit thresholds. This flexibility is a key feature enabling dynamic capital management but must be carefully structured to preserve alignment between sponsors and lenders.
Early-stage financing is evolving
US style borrowing base (Devex) facilities are emerging that provide developers with early-stage funding secured against a pre-defined pool of assets. This structure is milestone-driven and funds costs related to land tenure, permitting grid applications and EPC preparation, typically covering 30 to 50% of a pre-agreed valuation.
Structured as a revolving credit line, the Devex model enables developers to recycle risk capital across multiple in-development assets. For financiers, it provides diversification across pipeline risk and early access to deal flow. This will increasingly become a feature of the Australian market, particularly for developers with credible pipelines, disciplined origination and strong governance, who can meet the diligence standards required by structured credit providers. As demonstrated recently by Akaysha Energy, this model can also be structured at a global level to facilitate international growth and market expansion.
Structured equity is increasingly bridging the gap between development and construction. Sitting between senior debt and common equity, it offers downside protection for investors while giving developers greater flexibility and reduced dilution. It allows capital to move flexibly across projects and keeps pipelines advancing until construction debt is in place.
HoldCo mezzanine debt, well established in mainstream infrastructure, is now being applied to renewables. Positioned between senior debt and equity, it is typically used to plug funding gaps. However, as structurally subordinated capital, it carries higher risk and cost as it relies on distributions flowing upstream from the asset level.
Developers are also exploring the viability of adapting other globally proven capital structures to the domestic market. One structure gaining attention is the Ørsted-style HoldCo model, which bundles multiple operational assets into a single entity. By pooling cash flows, it enables more efficient debt raising, faster capital recycling and clearer pathways into institutional markets. As platforms scale, this model may represent the next evolution in Australia’s capital stack.
Joint ventures are accelerating growth
With projects becoming larger and more complex, joint ventures are accelerating. They allow developers to pool equity, expertise and risk, while giving investors earlier access points to long-term exposure. Recent examples include Enel Green Power and Inpex’s Potentia Energy, targeting firmed renewables, and ZEBRE, a storage-focused JV between HD Renewable Energy and ZEN Energy. As risk increases and competition intensifies, strategic partnerships are fast becoming an effective path to market.
Institutional capital is moving earlier
Traditionally, developers recycled capital through post-COD refinancings and asset sales, freeing up equity once projects were operational and de-risked. Now, institutional investors are entering much earlier in the lifecycle. Super funds, private capital and energy transition platforms are backing developers with strong pipelines and governance, not just fully de-risked operational projects.
Recent deals such as Blackrock Real Assets investment in Akaysha Energy and Cbus Super’s investment in Atmos Renewables, signal that large, diversified platforms (even those carrying early-stage development risk) are becoming the preferred entry point.
Debt capital markets – the next frontier?
As the market continues to scale and developer platforms mature, the natural evolution will be a shift toward accessing the debt capital markets (DCM), enabling greater capital diversification and long-term funding optionality. Green bonds, private placements, securitisations will increasingly complement or replace bank debt, particularly for refinancing, portfolio roll-ups, and investment-grade assets. The attraction is clear: longer-dated, fixed-rate capital from super funds, insurers, and global institutions.
But access to DCM is not automatic. Issuers must demonstrate:
Scale: capital markets are only viable above a certain threshold. Benchmark issuance typically starts at $150 to 300 million domestically and US300 to 500 million offshore. Smaller transactions struggle to justify the cost of structuring, legal, disclosure and ratings.
Predictable cash flows: investment-grade debt requires visibility and stability. Merchant exposure, especially in battery storage, complicates credit modelling and may limit investor appetite.
Aligned offtakes: while shaped and derivative-linked offtakes offer commercial flexibility, they introduce complexity for fixed-income investors who rely on predictable revenue profiles.
Operational maturity: greenfield projects are rarely financed directly through capital markets unless fully de-risked or back-leveraged.
Standardised documentation: capital markets expect consistency – tested covenants, common term structures and bankable security packages aligned with ratings methodology.
Looking ahead
The future capital stack will be modular, dynamic, and liquidity oriented. It’s no longer just about funding individual projects, it’s about building platforms that can scale, recycle capital and tap into the deepest pools of liquidity.
To keep pace with where the market is headed, developers must evolve into capital allocators, strategically managing risk, optimising structure and deploying capital with a portfolio mindset. Those who do will shape the next chapter of Australia’s energy transition.
Future capital stack
What this means for developers, investors and advisers
Five imperatives for success:
Map your capital stack against your pipeline maturity: understand what instruments align with each stage, from origination to refinancing.
Structure for platform-level flexibility: standardise asset eligibility criteria, governance and intercreditor frameworks across your pipeline.
Design exit-ready documentation from day one: make sure your projects can withstand investor due diligence at any point in the cycle.
Prepare for capital markets: start building investor-grade reporting and internal treasury capability early.
Partner strategically: choose advisers who understand not just the legal instruments, but the sequencing, monetisation pathways and syndication strategies that matter to institutional capital.
Watch: Shaping the future of renewables
Jamie Guthrie on the changing capital landscape in Australia’s renewable energy sector.