Australia's Carnegie Wave Energy has inked a $3.69m debt financing deal to support the Garden Island microgrid project that will integrate wave and solar energy with batteries.

The integrated microgrid project has already received $2.5m of funding from the Australian Renewable Energy Agency (ARENA).

It includes the construction and installation of a 2MW solar PV array, a 2MW/0.5MWh battery energy storage system and control system both to be integrated with Carnegie’s CETO technology and existing desalination plant.

The project, which is supported by network operator Western Power, will also include augmentation of the grid connection.

Carnegie’s chief financial officer Aidan Flynn said: “Not only will the Garden Island Microgrid Project be the first time anywhere in the world that wave energy will be combined with solar and batteries in a microgrid configuration,but it will also be the first time such a project has received debt finance.

“Signing of the Debt Financing Agreement for a project of this scale is financial validation for us that Carnegie’s microgrid diversification strategy is a clear path to commercialisation.”

Construction on the project is scheduled to begin before the end of 2016 and it will commence operations in the first half of 2017.

Designed to operate in “on-grid” mode and n “islanded” mode, the project is expected to be a template for remote islands and fringe of grid communities globally.

Flynn said: “The unique combination of renewable technologies and battery storage in a microgrid demonstrates the model we will roll out to island nations around the world. It is a significant commercial opportunity for Carnegie. The global market in microgrids is expected to grow to $40bn by 2020.”