Genex lines up final funds for $777m hydro project

Genex Power says it has secured the final pieces of a $777 million financing package that will allow the Kidston pumped storage hydro project to proceed. And it has flagged a start for construction activities at the North Queensland site next month. It comes through the launch of a fully underwritten capital raising for $90 million, which will allow Genex to proceed with the construction and operation of the project on a fully owned basis. Chief executive officer James Harding. The company also revealed it had received a conditional offer for grant funding up to $47 million from the Australian Renewable Energy Agency (ARENA). "We are now in the final stages of closing out the financing and commencing construction and look forward to updating the market as we complete these milestones over the coming weeks,” chief executive officer James Harding said. Related: Powerlink deal a key step towards hydro start The energy company had been working with a preferred equity partner to close out the project financing activities, but says it was unable to reach satisfactory commercial terms and will now progress the project to financial close on a 100 per cent-owned basis. The project financing includes a total investment by Genex of $120 million ($100 million equity subscription and $20 million shareholder loan for contingency), which will be funded from the proceeds of the capital raising well as a share subscription agreement with J-POWER and existing cash. The project has attracted NAIF debt funding of $610 million as well as the ARENA grant of $47 million. ARENA has also agreed to convert an existing $9 million development funding agreement into a non-recoupable grant. Genex said it was required to hold an EGM to approve the J-POWER share issuance, pushing expected financial close back to mid-May 2021, with construction activities planned to commence ahead of this in late April 2021. The company yesterday announced a deal with Powerlink Queensland to cover a further $258 million in work to connect the Kidston project to the grid. Hydro and transmission build to bring 800 jobs It says building the electricity infrastructure together with the pumped hydro project will deliver more than 800 new jobs in North Queensland. Located at the former Kidston gold mine, the 250MW/2000 MWh PHES project will make use of two existing mining pits. During peak power demand periods, water will be released from the upper to the lower reservoir, passing through reversible turbines. During off-peak periods and when the sun is abundant, water will be pumped back from the lower reservoir to the upper reservoir using electricity imported from the National Electricity Market (NEM). Genex already operates a 50 MW solar farm and has plans for a wind farm at the site. ARENA chief executive officer Darren Miller described the Kidston hydro project as landmark project, paving the way for renewables to play a larger role in Australia’s electricity grid. "Genex will be delivering the first pumped hydro project in Australia since 1984 and the first to be used solely for energy storage and generation rather than water management," he said. The Australian Government’s first Low Emissions Technology Statement has highlighted the importance of large scale energy storage solutions to facilitate more low cost solar and wind generated electricity into the grid. Zoom in to view closer:

Genex lines up final funds for $777m hydro project

Industry Queensland

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