Under the deal, EnergyAustralia will provide equity financing for the construction of the Kidston pumped hydro project, which will be jointly owned by the two companies.
Genex’s partnership with EnergyAustralia will see the Australian energy giant negotiate, finalize and execute a long-term offtake agreement and market rights attached to the project.
The term sheet is, however, in the early stages and is subject to final debt facility and equity documentation, financial arrangements and agreements for grid connection, plus approval from the boards of EnergyAustralia and Genex.
The Kidston facility is Australia’s first large-scale project to use pumped hydro to store solar generated power.
It is comprised of the operating 50 MW Stage 1 solar project, the Stage 2 projects – the 250 MW pumped storage hydro project and the multi-staged integrated solar project of up to 270 MW under development and Stage 3 – the Kidston Wind Project of up to 150 MW if proven feasible.
In September, Genex secured a development approval for the pumped storage component of the project, noting at the time that the project remains on track to commence construction in 2019.
Following the announcement of the storage project funding, Genex Power shares closed over 10% higher on Thursday.
As for the next step, Genex is looking to secure financing for the 270 MW solar farm, so that both hydro and solar components of the project can start generating electricity simultaneously in 2022.
After the Stage 1 solar farm was switched on late last year, Genex received a development approval for the second solar component in April this year.
“We are looking to close financing of Kidston Stage 2 on a stand-alone basis as we believe this is the most efficient means of reaching the construction stage as soon as possible,” said Genex chief executive officer James Harding.
“The solar farm remains a key priority for us, and we will be looking to close this soon after (Kidston Stage 2) as a discrete financing transaction.”
In terms of financing, Genex Power has secured a concessional debt funding of $516 million from the Northern Australia Infrastructure Facility for the second stage of its Kidston power facility, comprising the 270 MW solar PV plant and the 250 MW of pumped storage hydro project.
Previously, the Kidston energy hub, located on the site of a 100-year-old mine in Queensland, has received $8.9 million in funding from the Federal Government, through the Australian Renewable Energy Arena (ARENA) for the construction of the Stage 1 solar project, and up to $9 million in funding to support the development of Stage 2 Solar and Stage 2 Hydro.
In the latest release, Genex has also revealed that the acquisition of the 50 MW Jemelong solar project in New South Wales will be finalized in early 2019, provided project owner Vast Solar meets all conditions of the agreement.
When announcing the Jamelong acquisition earlier this year, Genex said the purchase was funded by strong revenues from the Kidston’s 50 MW Stage 1 solar project.