Japanese electric utility J-Power is looking to buy up to $25 million of Genex Power’s stocks with proceeds of the investment directed towards the 250 MW Kidston Pumped Hydro Project. The facility is part of Australia’s first large-scale project to use pumped hydro to store solar generated power.
The share subscription is subject to a price cap, which would result in J-Power owning a minimum of 15% stake. The maximum share capital the Japanese company, also known as Electric Power Development Co Ltd, could end up with stands at 19.99%.
The agreement is subject to several conditions, including approval by Genex shareholders, the execution of the agreement for more than half a billion dollars in concessional finance from the Northern Australia Infrastructure Facility (NAIF), and the financial close for the pumped hydro project occurring before the year’s end.
Under another condition, J-Power would tap its expertise in hydroelectric projects to provide technical advisory services regarding the Kidston pumped hydro project.
“The investment by J-Power is an important milestone, as it secures the funding for Genex’s equity component for K2-Hydro, which is being developed in a 50:50 partnership with Energy Australia,” said James Harding, CEO of Genex.
Early works on the 250 MW pumped hydro project are already underway. As announced in February, Genex selected EPC contractors McConnell Dowell and John Holland for the job.
The Kidston renewable energy hub 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.
After the Stage 1 solar farm was switched on in 2017, the Kidston renewable energy received a development approval for 270 MW of solar last April.
In September, Genex secured a development approval for the pumped storage component, noting at the time that the project remains on track to commence construction in 2019 and generation from 2022.
This was followed by a deal with Energy Australia, under which the electricity retailer will provide equity financing for the construction of the jointly owned Kidston Pumped Hydro Project and have exclusive rights to negotiate an off-take agreement.
In terms of financing, Genex Power has secured a concessional debt funding of $516 million from the NAIF – subject to a number of conditions and customary terms – for the second stage of its Kidston power facility.
Previously, the Kidston energy hub 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.