Interview with Adam Kiley, CEO, Frontier Energy
Our previous interview: https://www.cruxinvestor.com/posts/frontier-energy-asxfhe-federal-backing-transforms-outlook-for-wa-renewables-developer-6941
Recording date: 15th September 2026
Frontier Energy Limited (ASX:FHE) has reached the stage that most renewable energy developers never do: fully funded, fully contracted, and building. Stage One of its Waroona Renewable Energy Project in Western Australia comprises 132MW of solar generation and an 81.5MW, 6.9-hour battery storage system, at a total capital cost of A$310 million plus A$22 million contingency. A A$110 million equity raise has lifted institutional ownership on the register to around 30%, while Natixis CIB and Sumitomo Mitsui Banking Corporation have signed an underwriting letter for up to A$280 million in credit-approved debt facilities. Financial close is targeted for October or November 2026, with first debt drawdown in the first quarter of 2027.
The project's risk profile is unusually contained for its stage. Frontier used a free-issue contracting model, buying equipment directly from tier-one suppliers - LONGi, Trina, SMA, Nextracker - on fixed-price terms and supplying it to EPC contractor Monford, insulating the budget from input cost inflation. Long-lead items were ordered up to 12 months in advance, and a structured early-works process with the EPC surfaced scope gaps before financial close rather than during construction. Site mobilisation began in mid-September 2026, with peak construction workforce (around 200 people) expected from January 2027 and first revenue generation targeted for 2028.
Revenue certainty is the other pillar of the investment case. Independent forecaster Aurora, engaged by the project's lenders, models average annual revenue of A$72.5 million over the first five years, of which A$32 million comes from fixed-price Reserve Capacity payments locked until 2032. The project has also been selected for the federal Capacity Investment Scheme, which - alongside Reserve Capacity - extends a revenue floor through to 2042, sharing 50% of any upside above an agreed ceiling with government. Against $10 million of forecast opex, that produces average EBITDA of A$62.5 million (an 86% margin), a post-tax IRR of approximately 20%, and average free cash flow of roughly A$35 million annually after debt servicing and tax in the first five years.
Beyond Stage One, Frontier holds 830 hectares of freehold land in total and has development approval already in place for a similarly sized Stage Two (~130MW solar / ~80MW BESS), connected to Western Australia's largest 330kV transmission corridor. The state faces a structural supply gap - the market operator forecasts an additional 11.5 TWh of generation needed by 2031, rising to 18.3 TWh by 2036, as coal and gas capacity retires - compounded by fast-growing data centre demand, for which Frontier's uncommitted Stage One output and expandable substation design offer optionality.
The key near-term catalysts are financial close on the debt package and execution of the CIS contract, both expected within weeks of the September 2026 interview. Longer term, the size of the opportunity depends on how quickly management can replicate Stage One's fixed-price, government-backed model for Stage Two and beyond.
Learn more: https://www.cruxinvestor.com/companies/frontier-energy
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