Kidston solar-pumped hydro project resumes with funding extension

After Genex Power’s offtake agreement with EnergyAustralia fell through earlier this month its concessional federal funding lapsed. However, the Project has secured an extension into 2020, hopefully allowing it enough time to restructure and reach financial close.

November 14, 2019 Blake Matich

The Kidston pumped hydro project is transforming a remote site, which was once Australia’s largest gold mine, into a 21st century renewable energy hub.

Image: Genex Power

The Kidston solar-pumped hydro project (Project) has had its funding extended to 30 June 2020 by the Federal Government’s Northern Australia Infrastructure Facility Board (NAIF).

Sydney-based developer Genex Power Limited (Genex) had its funding fall through early this month after failing to lock in a previously announced offtake agreement with EnergyAustralia which resulted in Genex requesting a halt to its ASX trading.

The 250 MW Project had been initially scheduled to reach financial close inside the 2019 calendar. However, the failure to finalize the offtake contract with EnergyAustralia threw the Project off course. Thankfully, the NAIF has extended the date of its long-term concessional loan funding to 30 June 2020 for the Kidston Stage 2 project, a stage which includes not only the pumped storage project itself by up to 270 MW of integrated solar as well.

The $610 million NAIF funding, 12% of NAIF’s working budget, remains subject to several conditions, including the Queensland Government’s consideration of the Project.

James Harding, CEO of Genex, welcomed the continuing support of NAIF “in its development of the Kidston Pumped Storage Hydro Project, which reflects the significance of the Project to Northern Australia. Notwithstanding the setback earlier this month, we are continuing to maintain the momentum built up this year for the Project and with the support of NAIF and our other stakeholders, we are progressing the restructuring of the transaction with a view to achieving financial close on this iconic Project as soon as possible. We will continue to keep the market informed as these activities progress.”

It is not yet known how the lapse in funding earlier this month, nor the extension, will affect the Project’s other major funders, particularly Japan’s J-Power $25 million investment in Genex which is contingent on NAIF’s concessional finance and the projected financial close date of the Project within the 2019 calendar.

Nor is it yet known whether the Queensland government pledged $132 million in funding to the Project, announced in September, is affected. The funding is prescribed to build a single-circuit transmission line for main grid connection.

This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: editors@pv-magazine.com.