HMC Capital Ltd Secures Government Underwrite for 300MW Moorabool Battery
HMC Capital secures government-backed revenue underwrite for Moorabool battery project
HMC Capital (ASX: HMC) has been awarded a Capacity Investment Scheme Agreement (CISA) for its Moorabool Battery Energy Storage System (BESS) Project, known as VBB2. The award secures a long-term Federal Government-backed revenue underwrite for the development.
The CISA de-risks the project’s economics and further supports project financing and a Final Investment Decision (FID).
The 300MW four-hour VBB2 development sits within the company’s Energy Transition Platform, which holds a ~5.7GW development pipeline. Approximately ~2GW of that pipeline is targeting FID over the next 12 to 18 months.
VBB2 will add 1.2GWh of flexible storage and is located adjacent to the operating 470MWh Victorian Big Battery (VBB), northwest of Geelong. FID is targeted for 2026.
Equity funding to develop the Platform’s first BESS is committed via the KKR capital partnership, backing the Energy Transition Platform’s inaugural battery development project.
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Why the CISA award matters for project economics
A Capacity Investment Scheme Agreement is a Federal Government mechanism that underwrites a project’s revenue.
The announcement confirms VBB2 receives a “long-term Federal Government-backed revenue underwrite.”
For investors, the link is direct. More predictable revenue supports the path to a Final Investment Decision.
What the CISA delivers for VBB2
- Revenue underwrite: A long-term Federal Government-backed floor on project revenue, providing downside protection.
- De-risked economics: The underwrite de-risks the project economics.
- Path to FID: More bankable cashflows support project financing ahead of the targeted Final Investment Decision in 2026.
Inside the VBB2 Moorabool development
VBB2 is positioned at a strategically important location in the National Electricity Market (NEM) transmission network for Victoria. The project sits adjacent to the operating VBB, building on an existing operating platform where the company already holds relationships and offtake counterparties.
The development has secured Development Approval and key delivery partners. According to the announcement, offtake discussions are progressing well ahead of the targeted FID.
The table below summarises the key attributes of the project.
| Project attribute | Detail |
|---|---|
| Project | Moorabool BESS (VBB2) |
| Capacity | 300MW four-hour |
| Storage added | 1.2GWh |
| Location | Northwest of Geelong, adjacent to VBB |
| Status | CISA awarded, Development Approval secured, FID targeted 2026 |
Funding and the KKR capital partnership
Equity funding to develop the Platform’s first BESS is committed via the KKR capital partnership. The announcement notes this commitment is subject to customary conditions to closing, including Foreign Investment Review Board (FIRB) approval, and is expected to complete in mid-2026.
The KKR capital partnership was structured as preferred equity that is non-recourse to HMC, a design intended to insulate the listed entity’s balance sheet while funding the Energy Transition Platform’s development ambitions at scale.
Investors should note the funding is not yet fully closed. The completion remains conditional on those approvals being satisfied.
Separately, the Platform’s near-term pipeline development capital expenditure is fully funded to FID through existing facilities and internally generated cashflows.
The Energy Transition Platform’s scale and pipeline
The CISA award positions VBB2 as the first development project converting the Platform’s pipeline into value. The broader Platform provides the context for the investment thesis.
- 652MW of installed wind, solar and BESS capacity, positioning the Platform within the top 10 operating platforms in Australia.
- ~5.7GW development pipeline across wind and BESS.
- ~2GW expected to reach FID over the next 12 to 18 months.
- HMC Capital manages approximately $19bn, with $1bn of balance sheet co-investments across its platforms.
David Di Pilla, CEO and Managing Director
“Securing the CISA at Moorabool is a significant milestone that reinforces the value of HMC’s ~5.7GW energy pipeline. Together with KKR’s committed equity funding, the Platform is on a clear pathway to realising value on its first development project.”
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What comes next for HMC Capital investors
The roadmap centres on converting development pipeline into delivery. FID for VBB2 is targeted in 2026, while the KKR equity funding completion is expected in mid-2026, subject to FIRB approval.
Beyond VBB2, approximately ~2GW of the broader pipeline is expected to reach FID over the next 12 to 18 months.
With the CISA secured, Development Approval in place and offtake discussions progressing, the Platform moves a step closer to delivering on its first development project.
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