The Northern Australia Infrastructure Facility (NAIF) is to provide a long-term concessional loan valued at up to $610 million to finance the 250MW Kidston Pumped Storage Hydro Project in Australia, developer Genex Power has announced.
The Investment Decision is based on the final terms of the ESSA which was signed with Energy Australia Pty Ltd on 29 March 2020. The Investment Decision is subject to the negotiation and execution of the final finance documentation, and to the satisfaction or waiver by NAIF of the conditions precedent within that documentation including the finalisation of the Queensland Government’s consideration of the project and the finalisation of negotiation and funding arrangement of the transmission infrastructure for the project. The NAIF’s Investment Decision is also subject to the Minister’s legislative consideration period.
Genex also announced that it had reached agreement to extend the deadline for the ESSA executed with Energy Australia and the SSA and TSA with Electric Power Development Co.Ltd (J-POWER) . Original conditions for these included a financial closure date of 31 December 2020, but this has now been extended to 28 February 2021. The ESSA Amendment Deed also includes a number of changes to the terms of the ESSA to provide alignment with the fully negotiated project documents to ensure the Project operating risks are appropriately mitigated.
Following the NAIF Investment Decision and based on the advanced nature of the limited number of outstanding investment approvals, financing and project documentation, the Genex Board has formally resolved to proceed with the financing and construction of the Project through a positive Final Investment Decision.
Genex is now working with all stakeholders to finalise documentation and conclude the project financing activities early next year with a view to commencing construction within Q1 2021.
“Genex is now in a position to close out the remaining workstreams necessary to reach Financial Close of the Kidston Pumped Storage Hydro Project. We highly appreciate the ongoing support of NAIF with its updated Investment Decision to support the Project with a concessional debt facility of up to $610m,” commented Genex CEO James Harding. “This development, alongside the advanced nature of documentation and the other limited outstanding investment approvals, has enabled the Genex Board to make a positive Final Investment Decision to proceed with the Project.
"The Project delivers a step change in scale for Genex and cements relationships with globally respected energy market leaders. We are also pleased with the ongoing support of Energy Australia and J-POWER, with the extensions to the existing agreements with these parties enabling us to now push on with financial close early in the new year. The Kidston Pumped Storage Hydro Project is a complex project involving multiple stakeholders, contractors and project financiers. Whilst a number of delays have been experienced in moving the project towards financial close, management has been working tenaciously, diligently and consistently on the many workstreams, including legal and contract documentation, permitting and funding arrangements to bring the project to conclusion in the fastest possible time. I am delighted to say that we are now moving rapidly towards anticipated financial close of the project in February 2021.”