The Federal Government will stump up a $610 million loan to Genex Power to finance the Kidston Stage 2 Pumped Storage Hydro Project (K2_Hydro).
The project is on the old Kidston Mine south west of Cairns.
The long-term concessional debt facility comes out of the Northern Australia Infrastructure Facility.
The K2 Hydro project was progressing well said Executive Director Simon Kidston.
His confidence was based on the start of an early works program on hydraulic design of the turbines, environmental approvals and a $25 million share subscription agreement, among others.
NAIF’s investment decision is subject to the responsible Federal Minister’s legislative consideration period, the company told the ASX.
The statement also said NAIF’s financial assistance to the project was also subject to a number of conditions including the finalisation of the Queensland Government’s consideration of the project and its agreement for the approved funds to be advanced.
The decision by the NAIF Board in providing its investment decision approval is a further indication of the significance of Genex’s K2-Hydro project for northern Australia said Genex CEO James Harding.
“We have been gaining momentum with this project over the last few months and are confident that, given the status of discussions with the various relevant stakeholders in the project, Genex will be in a position to reach financial close before 30 September this year.”
The Kidston Project investment represented just over 12 percent of NAIF’s total $5 billion facility, said NAIF Chief Executive Officer Laurie Walker.
“Energy storage facilities have a significant role to play in Australia’s transition to a low emissions, low cost energy future,” Mr Walker said.
“The project will provide Far North Queensland with 250MW of firm, dispatchable energy, improving energy reliability while lowering transmission losses and electricity prices.
“The conditional support NAIF provided to the Project last year acted as a catalyst bringing confidence to Genex’s investment which unlocked other support for the project, helping move the project forward.
“Over 500 jobs will be created during the construction of this project and associated infrastructure. NAIF has a vital role in delivering infrastructure, creating jobs, growth and public benefit in northern Australia.”