Frontier Energy secures 2042 revenue floor for Waroona

Frontier Energy (ASX:FHE) secured long-term government-backed revenue protection through the federal capacity investment scheme.

The agreement provides a guaranteed revenue floor until 2042 for Stage 1 of the Western Australian development, a move analysts describe as a "major de-risking event" that enhances the project's bankability.

By underwriting the dispatchable capacity of the site’s integrated 81.5MW battery and 120MWdc solar array, the CIS support provides the financial certainty required to finalise a comprehensive debt funding package.

Frontier has engaged with shortlisted tier-one financial institutions to solidify senior debt terms, with proposals indicating gearing of up to 70% and tenors extending 25 years.

The arrangements are further bolstered by mezzanine financing proposals reaching $100 million.

The capital structure complements the project’s existing fixed-price capacity credits, which are already slated to deliver $32 million in annual revenue certainty through 2032.

While Frontier’s 2025 annual report noted a net loss of $5.17 million and the full impairment of the Superior Lake Zinc and Copper Project, the company’s strategic pivot towards renewables is now firmly capitalised.

A post-year-end placement of $11.5 million has strengthened the balance sheet as the company moves towards a final investment decision.

At the time of reporting, Frontier Energy’s share price was $0.27.