Genex Power’s Kidston Stage 2 Pumped Storage Hydro Project (K2-Hydro) is a step closer with the Northern Australia Infrastructure Facility’s (NAIF) decision to offer finance for the project of up to $610 million.
Since Genex first announced the involvement of NAIF in the Company’s K2-Hydro, Genex has worked closely with the NAIF management team to complete the due diligence required for the NAIF Board to consider an Investment Proposal.
The financial close process for K2-Hydro is now advancing rapidly, with the Genex Board confident that it will be in a position to reach financial close in the third quarter of this year, following a recent succession of significant positive announcements for this project including:
- Signing of a term sheet with EnergyAustralia for a long-term energy storage services agreement and equity investment
- Commencement of an early works program surrounding the hydraulic design and related activity for the hydro turbines
- Receipt of final environmental approvals
- $25 million share subscription agreement and technical services agreement with J-Power, for which this NAIF Investment Decision is a key condition precedent
- AEMO GPS Approval
NAIF’s Investment Decision is subject to the responsible Federal Minister’s legislative consideration period. NAIF’s Financial assistance to the project is also subject to a number of conditions, including the finalisation of the Queensland Government’s consideration of the project and its agreement for the approved funds to be advanced.
CEO of Genex, James Harding, said, “The decision by the NAIF Board in providing its Investment Decision approval is a further indication of the significance of Genex’s K2-Hydro project for northern Australia.
“We have been gaining momentum with this project over the last few months and are confident that, given the status of discussions with the various relevant stakeholders in the project, Genex will be in a position to reach financial close before 30 September this year.”
CEO of NAIF, Laurie Walker, said, “The Kidston Project investment represents just over twelve per cent of NAIF’s total $5 billion facility. Energy storage facilities have a significant role to play in Australia’s transition to a low emissions, low cost energy future.
“The project will provide Far North Queensland with 250MW of firm, dispatchable energy, improving energy reliability while lowering transmission losses and electricity prices.
“The conditional support NAIF provided to the Project last year acted as a catalyst bringing confidence to Genex’s investment which unlocked other support for the project, helping move the project forward. Over 500 jobs will be created during the construction of this project and associated infrastructure.
“NAIF has a vital role in delivering infrastructure, creating jobs, growth and public benefit in northern Australia.”