LGI Limited (ASX:LGI) is buying two operating Queensland solar farms for $22 million, adding 42MW of export capacity at a price below the company’s stated greenfield replacement cost. The transaction lifts LGI’s targeted medium-term renewable and dispatchable capacity pipeline beyond 120MW, although the projected earnings contribution depends on electricity prices, synergies and software integration.
- 42MW of operating solar export capacity acquired for $22 million
- Estimated annual EBITDA contribution of $2.1 million to $4.0 million
- Brigalow and Chinchilla have 54MW of installed capacity combined
- Medium-term strategic pipeline increases beyond 120MW
- Completion expected on 9 October with cash and existing debt facility funding
LGI buys operating solar below replacement cost
LGI has agreed to acquire two operating Queensland solar farms for $22 million with no associated debt, securing 42MW of export capacity without waiting for a greenfield development cycle. The purchase price works out at roughly $0.5 million per export megawatt, which LGI says is materially below the cost of developing comparable assets from scratch.
The deal covers the 27.3MW Brigalow Solar Farm near Yarranlea and the 14.7MW Chinchilla Solar Farm at Baking Board. Together, the sites have 54MW of installed generation capacity, with more than 30 years remaining on each land lease.
Earnings range depends on prices and DACS rollout
At current electricity prices, LGI estimates the assets will contribute annual EBITDA of between $2.1 million and $4.0 million. That is a range rather than a firm earnings forecast: the company says the outcome depends on the timing of revenue synergies and the successful implementation of its Dynamic Asset Control System, or DACS.
The presentation separately points to approximately $1.6 million of EBITDA in FY27, assuming nine months of contribution. Both solar farms are currently 100% spot exposed. Chinchilla began commercial operations in 2019 and generated 20,981 MWh in 2025, while Brigalow commenced in 2021 and generated 33,229 MWh.
Solar purchase pushes pipeline beyond 120MW
The acquisition gives practical shape to the expansion beyond 80MW that LGI outlined in August, when it reported a $56 million capital raise to fund growth. The company now describes its medium-term strategic pipeline as exceeding 120MW of distributed, renewable and dispatchable capacity, while retaining its previously announced 80MW high-conviction pipeline.
LGI plans to bring operations and maintenance in-house, saying the farms are close to its existing assets in the Toowoomba and Western Downs regions. It also intends to apply DACS to both sites to manage dispatch and improve price outcomes across its energy portfolio, which already includes landfill biogas generation and battery storage activities.
Battery storage offers upside but remains uncommitted
The mismatch between installed capacity and network export capacity gives LGI room to consider battery energy storage systems at one or both farms. The company says preliminary studies have begun and early viability work supports further consideration, but no battery investment has been committed as part of this transaction.
LGI will fund the purchase with cash at bank and undrawn funds from its existing debt facility. Shareholder approval is not required, no material conditions remain outstanding and completion is expected on 9 October. The company says it will target net debt to EBITDA below 2x as it builds out the portfolio, leaving execution of the operating transition, DACS rollout and earnings realisation as the next tests of the acquisition case.
Bottom Line?
The headline attraction is immediate operating capacity bought below replacement cost; the harder question is how quickly LGI can convert spot-exposed solar, in-house operations and DACS control into the upper end of its EBITDA range.
Questions in the middle?
- Will the two farms deliver closer to the lower or upper end of LGI’s $2.1 million to $4.0 million annual EBITDA estimate?
- How quickly can LGI complete the operations transition and deploy DACS across both sites?
- Will battery storage be added, and what funding impact would that have on the company’s below-2x leverage target?