Frontier Energy Secures $110m Equity Raising Commitments for Waroona Stage One

Frontier Energy (ASX: FHE) has secured firm commitments to raise $110 million before costs through a conditional placement to support Stage One financing for its Waroona solar-battery project in Western Australia.

The placement will comprise 550 million new fully paid ordinary shares at $0.20 per share to new and existing institutional, professional, and sophisticated investors.

The $0.20 placement price represents a 23.1% discount to Frontier’s last closing price of $0.260 per share on 1 June.

The equity and debt financing package would leave Stage One fully funded and ready to commence after a final investment decision by the board.

All Frontier directors have provided firm commitments to participate in the conditional placement for a total of approximately $3.3m, subject to shareholder approval.

Debt Financing Advances

Frontier has been progressing senior debt finance in parallel with the placement and expects credit-approved commitments from shortlisted financiers in July.

The company has received detailed term sheet responses from tier-one financial institutions, completed an independent technical report by Aurecon as independent technical engineer, and finalised legal and tax due diligence.

The proposed debt terms also include a notional tenor—including construction—of up to 20 years and interest rate margins consistent with infrastructure project financing.

“The equity raising is a pivotal achievement for Frontier as it paves the way for our Stage One Senior Debt Finance to progress towards binding credit approval and then to financial close,” executive chair Jamie Cullen said.

“Together with our already strong support from existing investors, the appetite from new investors highlights both the quality of our Stage One project and the pipeline for future development at Waroona to create a major renewable energy precinct in the southwest of WA.”

Waroona Contracts Near Execution

Frontier has advanced major engineering, procurement, and construction contracts toward execution with preferred parties as part of the Stage One financing process.

The major works contracts cover the Stage One facility, a 330-kilovolt Waroona sub-station and the Western Power interconnection works contract.

Stage One now comprises a 132 megawatt solar plant and an 81.5MW battery energy storage system (BESS) with 6.9-hour duration.

Key equipment supply contracts will include approximately 200,000 photovoltaic modules at 660W per panel, 156 BESS containers, 1,855 trackers, and 26 power conversion system inverters.

Capital Estimate Updated

Frontier has updated the Stage One capital estimate to approximately $310m before contingency and about $326.9m including contingency.

The increase compared with the December 2024 definitive feasibility study reflects the move to larger solar panels, a larger and longer-duration BESS, and higher construction costs driven largely by inflation.

Frontier said the larger solar facility and expanded BESS would increase energy generation and sales while improving Stage One economics.

Proceeds from the placement will also help advance early works for a Stage Two expansion at Waroona.