Chichester Solar and Gas Hybrid Project
Learn about the NAIF loan supporting the Chichester Solar Gas Hybrid Project, public benefits, Indigenous engagement, and economic impacts.
February 2019
Energy
Mount Sheila, WA
In 2019, NAIF committed up to $90 million in concessional finance to support the Chichester Solar Gas Hybrid Project in Western Australia’s Pilbara region. Designed to power Fortescue Metals Group’s Chichester Hub mining operations, the project combines solar and gas generation with new transmission infrastructure to reduce diesel reliance and deliver cleaner, more reliable energy.
Construction began in 2020 and was completed by Alinta Energy in December 2021, with APA Group acquiring the project in late 2023.
About APA Group
APA Group is one of Australia’s largest energy infrastructure businesses, owning and operating critical assets across natural gas, electricity, solar and wind. With operations spanning every mainland state and territory, APA plays a vital role in delivering energy to millions of Australians and enabling the country’s energy transition.
The company is ASX-listed (APA) and manages a portfolio of approximately $26 billion in energy infrastructure. APA Group is committed to decarbonisation and has set a target of net zero operations by 2050.
The original NAIF Investment Decision for the Chichester Solar Gas Hybrid Project was awarded to Alinta Energy in 2019, who developed and delivered the project through to completion. APA Group acquired the project from Alinta Energy in November 2023 and now owns and operates the asset.
Project Overview
This project involved building a new solar photovoltaic generation facility at the Fortescue Metals Group’s Chichester Hub iron ore operations. It also included the construction of a 60 km transmission line linking Fortescue’s Christmas Creek and Cloudbreak mining operations in the Pilbara with the existing high voltage transmission network and Newman gas-fired power station and 35 MW battery facility.
The project is displacing 100 million litres of diesel generation annually from the Pilbara, delivering a cleaner, more affordable, and more connected energy supply.
Other supporting infrastructure included a 60 MW solar photovoltaic power station, along with transmission infrastructure, switchyards and substations to supply electricity.
How We Helped
NAIF provided concessional finance of up to $90 million with a longer loan tenor and flexible terms. This support enabled the development of renewable energy infrastructure to power Fortescue Metals Group’s Chichester Hub, replacing diesel generation with renewable electricity and delivering long-term environmental and economic benefits.
NAIF’s role included de-risking the project by providing finance structured to match its long-term nature and addressing risks that were beyond the appetite of commercial lenders. By acting as a gap financier, NAIF enabled the project to proceed while also encouraging private sector participation from traditional lenders. In addition, NAIF worked in partnership with the Australian Renewable Energy Agency (ARENA) to deliver the required funding mix.
Through this support, the Chichester Solar Gas Hybrid Project was delivered to provide reliable, renewable electricity to one of Australia’s largest mining hubs, reducing reliance on diesel, cutting emissions, and creating long-term economic and environmental benefits for northern Australia.
Public Benefit
Deloitte Access Economics, in an independent cost-benefit analysis, forecast public benefits of $221 million over the 25-year operational lifetime and generating around 200 jobs during the construction phase.
The project is an important step towards a broader interconnected network across the Pilbara, with the potential to improve accessibility, efficiency, reliability and costs of power across the region for both businesses and residents.
This is an amazing project. Displacing diesel generation with clean solar energy has never been tried at this scale in Australia. This project will be a major contributor to Fortescue’s goal of achieving net zero operational emissions by 2040, and Alinta Energy’s commitment to invest in 1,500 MW of renewable energy projects by 2025.
Scott Thomas
Alinta Energy GM, Power Generation
Related Links
Indigenous Engagement
- The Nyiyaparli people
The Chichester Solar and Gas Hybrid Project is located on Nyiyaparli Country in the East Pilbara region of Western Australia, spanning approximately 40,000 square kilometres of land and waters, encompassing the towns of Newman and Aboriginal communities of Jigalong and Parnpajinya, along with multiple pastoral leases and significant mining operations. The traditional boundaries of Nyiyaparli Country include the Fortescue River to the north, the Hamersley Ranges to the south and have lived on this land for over 41,000 years, maintaining a deep spiritual and cultural connection to Ngurra (Country). The Karlka Nyiyaparli Aboriginal Corporation acts on behalf of the Nyiyaparli Traditional Owners, managing their Native Title rights, and supporting caring for country, cultural, economic, and community development.
Indigenous Engagement Strategy Commitments
- The original Indigenous Engagement Strategy (IES) for the Chichester Solar and Gas Hybrid Project was developed by Alinta Energy and covered commitments across key areas, including participation, procurement, employment, and community engagement.
- The IES was revised when the APA Group took over the project and committed to collaborating with the Nyiyaparli community to identify employment and procurement prospects while safeguarding and preserving cultural heritage. In a testament to their commitment, the APA Group ensures that all its employees, project contractors, and partner organisations undergo cultural awareness training in collaboration with the Nyiyarparli people.
Indigenous Engagement Strategy Outcomes
- In 2021 and 2022, during the construction phase, Nyiyaparli owned business Coongan delivered cross-cultural awareness training to the project team. First Nations employment reached 7.5% and procurement with Indigenous businesses reached over $4.7m.
- In 2022, Alinta Energy maintained its partnership with the Karlka Nyiyaparli Aboriginal Corporation (KNAC), continued cultural immersion activities with Coongan, participated in key First Nations community events, and provided grants to community organisations supporting First Nations mentorship and cultural awareness through its Community Grants Program.
- In 2023, the Indigenous Engagement Strategy (IES) transitioned from Alinta to the APA Group, which committed to ongoing engagement with KNAC and to identifying contracting opportunities with First Nations businesses across the Pilbara region.
- In late 2023 and 2024, APA reported a $3.4m national spend supporting First Nations communities, including investments in carbon offsets, heritage and environmental management, and asset maintenance. APA also supported cultural and community initiatives such as the First Lights Drone Show in Port Hedland and partnerships with the Fred Hollows Foundation, Clontarf Foundation, and STARS Foundation.
