MPower Group has completed a pivotal equity conversion of its Narromine Renewable Energy Project, extinguishing $10.36 million in project funding and positioning itself for a $700,000 gain. The company also secured additional financing and advanced its renewable energy pipeline amid ongoing operational challenges.
- Narromine project equity fully converted to AMPYR, extinguishing $10.36 million debt
- Expected $700,000 gain on deconsolidation of Narromine asset
- Sale agreement reached for Faraday Renewable Energy Project development assets
- Additional finance facilities secured to support ongoing operations
- Operating cash flows remain negative, with increased loan facilities to sustain activity
Narromine Equity Conversion Completed
MPower Group Limited (ASX – MPR) has successfully completed the conversion of its $10 million project funding facility into equity for the Narromine Renewable Energy Project. This transaction, finalised in February 2025, resulted in AMPYR Distributed Energy acquiring 100% equity in the project, effectively extinguishing all outstanding funding costs, including principal and accrued interest amounting to $10.36 million.
The completion of this equity conversion marks a significant milestone for MPower, as it expects to record a gain of approximately $700,000 upon the deconsolidation of the Narromine asset. This gain will be reflected in the company’s full-year financial results following final accounting treatment and auditor review.
Advancing Renewable Energy Pipeline and Asset Sales
Alongside the Narromine transaction, MPower has reached an agreement to sell development assets related to the Faraday Renewable Energy Project for an estimated $0.5 million. This sale remains conditional on typical precedent conditions and is expected to complete in the coming months, providing further capital to support the company’s operations.
MPower continues to actively advance its pipeline of hybrid renewable energy projects, focusing on distribution-connected solar and battery storage solutions. The company is refining its strategic approach to project design, delivery, and funding, aiming to build a robust portfolio aligned with its Build Own Operate model.
Financial Position and Operational Challenges
Despite these positive developments, MPower’s operating cash flows remain negative, with net outflows of $406,000 reported for the quarter ending March 2025. To sustain its level of activity, the company has secured additional unsecured finance facilities, increasing its working capital availability to $2.5 million. This includes loans from private lenders and Tag Capital Pty Limited, with total drawn facilities of approximately $11.1 million.
MPower acknowledges that current cash resources are stretched and not sustainable long-term without continued funding support. The company is reliant on ongoing discussions with funding partners to secure project financing and maintain operations.
Outlook and Strategic Focus
Looking ahead, MPower is positioning itself to capitalise on the growing demand for renewable energy infrastructure in regional Australia. The Narromine project, a 6.7MWdc solar farm with advanced bifacial photovoltaic modules and single central inverter technology, is expected to generate over 14,000MWh annually, contributing clean energy to the South West Orana region of New South Wales.
With the Narromine equity conversion behind it and additional financing in place, MPower’s focus will be on progressing its development pipeline, securing project funding solutions, and executing asset sales to strengthen its balance sheet. The company’s ability to manage cash flow and funding risks will be critical as it navigates the next phase of growth in the renewable energy sector.
Bottom Line?
MPower’s Narromine equity conversion and financing moves set the stage for growth, but funding sustainability remains a watchpoint.
Questions in the middle?
- When will the Faraday Renewable Energy Project asset sale complete and what impact will it have on liquidity?
- How will MPower manage ongoing negative operating cash flows amid project development?
- What are the prospects for securing additional project funding to support the company’s Build Own Operate strategy?