Genex Power Ltd’s 250MW Kidston Stage 2 pumped storage project could reach financial close by the end of September 2019, the company has suggested, as it was announced that the Northern Australia Infrastructure Facility (NAIF) has approved a loan of up to $610 million – its largest investment to date – for the project.

Since Genex first announced the involvement of NAIF, it says it has worked closely with the NAIF management team to complete the due diligence required for the NAIF Board to consider and investment proposal.

The financial close process for K2-Hydro is advancing rapidly, with the Genex Board confident that it will be in position to reach financial close in the third quarter of this year following the recent succession of announcements for the project, including: signing of a term sheet with Energy Australia for a long-term energy storage services agreement and equity investment; commencement of an early works programme; and receipt of final environment approvals.

The Kidston Project is forecast to deliver $814m of public benefit to the broader economy and community. Public benefit from the project includes direct value added to the Far North Queensland economy of $235 million through 510 jobs which will be created during the construction phase of both the Project and the associated transmission line and approximately 30 ongoing jobs once the project is operational.  Infrastructure Australia was consulted on the project’s public benefits and cost benefit analysis.

The project will buy power and store power from the National Electricity Market when it is cheap and plentiful in off peak periods.  It will then sell it back to the market when prices go up in periods of high demand, typically in the morning and evening peak periods.  The additional source of peak generation capacity will lead to lower average wholesale power prices which would flow to end users through the competitive retail power market.

In providing a long-term concessional loan to the Project, NAIF will help enable the Project to overcome barriers common to infrastructure investment in northern Australia including increased labour, transport and materials costs due to remoteness, and challenges in securing more expensive linking infrastructure.

“The conditional support NAIF provided to the Project in 2018 acted as a catalyst by bringing confidence to the project,” explained NAIF CEO Ms Laurie Walker. “This helped Genex to move the project forward by obtaining other support for the project, including signing a term sheet with EnergyAustralia for a long-term offtake agreement and equity investment.”

Genex has committed to maximise job opportunities for the local Ewamian people and for Indigenous businesses where possible. Genex will also provide funding for the Ewamian Aboriginal Corporation’s Talaroo Hot Springs Tourism Project, a local Indigenous owned tourist facility.  These initiatives contribute to meeting NAIF’s requirement for an Indigenous Engagement Strategy.

The Project has been designated as a prescribed project and ‘Critical Infrastructure’ by the Queensland Government.

NAIF’s Investment Decision is subject to the Minister’s legislative consideration period. NAIF’s financial assistance to the Project is 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 Queensland Government’s commitment to linking transmission infrastructure for the Project and EnergyAustralia’s final approval of its commitment to the project.


Pictured announcing the Investment Decision (left to right): Senator Matthew Canavan, Minister for Resources and Northern Australia, Dr Ralph Craven, Genex Power Chairman, Nick James, NAIF Executive Director Major Projects, James Harding, Genex Chief Executive Officer.