Genex Power informed investors on Nov. 1 that “it no longer anticipates it will reach financial close on the [Kidston Pumped Storage Hydro] Project in CY 2019,” after having received notice from EnergyAustralia Pty Ltd that “it will not be in a position to reach a positive investment decision on the basis of the long term energy agreement structure.”
Genex Power was targeting a final investment decision in CY 2019 as part of its final approval process for the proposed 250-MW hydro project.
The utility entered into a term sheet with EnergyAustralia in December 2018 for a long term energy agreement and equity investment in the project, and the two have been working to conclude due diligence and finalize the terms of the transaction.
The project, also known as the K2-Hydro project, is part of the Kidston Renewable Energy Hub in far-north Queensland (Kidston Hub). The Kidston Hub is comprised of the operating 50-MW Stage 1 Solar Project (KS1), the K2-Hydro project and the multi-staged integrated solar project of up to 270 MW (K2-Solar) under development and the Kidston Stage 3 Wind Project of up to 150 MW under feasibility study.
Genex Power now says it anticipates that the Northern Australia Infrastructure Facility (NAIF) concessional loan offer and the J-POWER share subscription agreement, both “major milestones achieved in 2019,” will lapse at or before Dec. 31, 2019. NAIF approval of a $610 million concessional loan for the project was received in July 2019, and J-POWER and Genex signed a $25 million share subscription agreement for Genex’s equity requirement for the project in June 2019.
The utility says it “will continue to work with EA and its other financiers and counterparties, including NAIF and J-POWER, to restructure the financing for the transaction to ensure a positive investment decision can be reached and financial close can be achieved. This is now anticipated to occur in 2020.”