Genex said the $44.5 million (USD 29.63 million) structured funding package will be used to shore up financing for the company’s flagship 250 MW/2 GWh Kidston Pumped Storage Hydro project in northern Queensland and to develop its multi-stage Bulli Creek solar and battery project near Toowoomba.
J-Power, which is among Genex’s largest shareholders following a $25 million equity investment announced in 2019, has agreed to provide a corporate loan facility of $35 million as a standby source of funding for the 250 MW, eight-hour pumped hydro project.
Genex said the funding may not be needed but in the wake of a drilling incident late last year that set construction back, the replenishment of the project contingency is considered prudent to ensure the project remains on track for energisation in 2024.
It was estimated the incident, which resulted in water unexpectedly leaking into a tunnel, added $10 million to $15 million to the project’s cost.
“While the costs of the water ingress event at the Kidston pumped storage hydro project last year have been fully funded, we consider it prudent that additional funding is secured against any further unforeseen events during the balance of the construction program,” Genex Chief Executive Officer James Harding said in a statement. “The loan facility with J-Power gives us significant buffer to complete the construction of the project.”
On top of the loan facility, J-Power will also establish a joint development fund for Genex’s Bulli Creek solar and battery project which is expected to be developed in five stages. The first stage will entail the delivery of a 400 MW/1,600 MWh big battery. while the second proposed stage would deliver a 475 MW to 675 MW solar project.
The joint development agreement gives J-Power a 50% interest in the project courtesy of upfront acquisition funding of $2.5 million and a further $6 million in upfront funding for third party development costs. J-Power has also entered into a development funding agreement with Genex and will contribute $1 million to cover early costs of the project.
Once the initial funding has been utilised, ongoing third-party development costs for Bulli Creek will be funded by both companies on a 50:50 basis.
Harding said the agreement extends the strategic partnership initiated via co-development of the 258 MW Kidston Stage 3 wind project and reaffirms Genex’s relationship with J-Power as it continues to expand its portfolio of renewable energy generation and storage assets in Australia.
“This funding will be instrumental in fuelling the growth of our renewable energy portfolio in Australia,” he said. “In addition to the loan facility, the joint development agreement for the Bulli Creek Project will allow us to fast-track development activities at this exciting project, which represents the next phase in the company’s growth.”
Image: Genex Power
The funding announcement comes just days after Genex completed the energisation of its first large-scale battery, the 50 MW/100 MWh Bouldercombe project, near Rockhampton in Queensland.
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