Genex Power (ASX: GNX) has finally collared the majority of funding needed to develop its Kidston stage two pumped storage hydro project in far north Queensland, with Northern Australia Infrastructure Facility’s (NAIF) board approving a $610 million debt facility.
The debt facility follows J-Power agreeing to subscribe for up to $25 million worth of Genex shares through a share subscription agreement last month.
As part of the share subscription deal, J-Power will hold up to 19.99% of Genex and appoint a nominee to Genex’s board.
J-Power will also provide Genex with technical advice for the development and operation of the Kidston stage two hydro project.
According to Genex, the deal with J-Power was a key condition for NAIF to approve the $610 million facility.
“The decision by the NAIF board in providing its investment decision approval is a further indication of the significance of Genex’s Kidston stage two hydro project for northern Australia,” Genex chief executive office James Harding said.
“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,” he added.
Kidston clean energy hub
Genex’s Kidston hydro project is the second stage of the company’s renewable energy hub in Queensland.
Once complete, the 250-megawatt stage two hydro infrastructure will add to a 50MW solar farm, a multi-staged 270MW integrated solar farm and a 150MW stage three wind project.
NAIF chief executive officer Laurie Walker said the organisation’s investment in Genex’s stage two hydro project represented just over 12% of the organisation’s $5 billion facility.
“The project will provide far north Queensland with 250MW of firm, dispatchable energy, improving reliability while lowering transmission losses and electricity prices,” she explained.
Ms Walker added the project will create more than 500 jobs during construction.
In addition to NAIF’s funding, the Queensland Government has afforded Genex a 20-year revenue support deed and has designated the hub as critical infrastructure for the state.
The Australian Renewable Energy Agency has also put up almost $18 million in finance for developing the hub’s various renewable energy projects.
By midday, Genex’s shares were up 8.33% to $0.26.