Sydney-based developer Genex Power said it would not be able to secure finance on its landmark 250 MW Kidston pumped hydro project until next year after electricity retailer EnergyAustralia had pulled from an offtake deal announced last December. Before it announced that it was unable to reach financial close on the project in 2019, Genex had requested a trading halt on their securities.
“In the light of this development, Genex wishes to advise that it no longer anticipates that it will reach financial close on the project in calender 2019,” the developer said in a statement to the ASX.
The failure to finalize the offtake contract with EnergyAustralia will also affect a number of other major deals, including a $25 million share subscription agreement with Japan’s J-Power and a $610 million loan from the North Australian Infrastructure Facility. Genex said that both deals would lapse in December.
In the meantime, the developer will continue to work with the government fund, J-Power and EnergyAustralia to restructure the financing and ensure financial close can be reached. “This is now anticipated to occur in 2020,” it said.
The Kidston facility, Australia’s first large-scale project to use pumped hydro to store solar-generated power, 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.
Last 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 would provide equity financing for the construction of the jointly owned Kidston Pumped Hydro Project and have exclusive rights to negotiate an off-take agreement.
Early works on the 250 MW pumped hydro project were already underway. As announced in February, Genex selected EPC contractors McConnell Dowell and John Holland for the job. In the meantime, the project has received final environment approvals and the Generator Performance Standard from the Australian Energy Market Operator (AEMO).
More funding news followed in June when Japanese electric utility J-Power revealed plans to buy up to $25 million of Genex Power’s stocks with proceeds of the investment directed towards the Kidston pumped hydro project. In July, the project landed a concessional debt funding of $610 million from the NAIF.
In September, the Queensland government pledged to support Genex’s project at Kidston with up to $132 million. The funding would be used to build a single-circuit transmission line and connect a massive pumped hydro project with the main grid, unlocking additional stages for the clean energy hub, including up to 270 MW of additional solar and up to 150 MW of wind.