Genex Power has announced it has received support from the Northern Australia Infrastructure Facility (NAIF) for its Kidston Stage 2 project.
The NAIF board has provided an indicative term sheet for the project, which outlines the basis on which NAIF could provide the project with a subordinated loan facility of a maximum of $516 million with a tenor of 28 years.
It includes a number of conditions and significant commercial agreements to be put in place by Genex, as well as due diligence to advance the project to a potential NAIF Investment Decision.
The renewable energy project, located in an unused gold mine in North Queensland, included a 250MW pumped hydro project, with 1500MWh storage capacity, a 270MW solar facility and a 150MW wind farm.
It would generate about 500 jobs during the construction phase over a three-year period and 20 fulltime jobs over the 100-year life span of the project.
Genex CEO James Harding said the company hopes to achieve financial close of the project by the end of the year.
“Genex is very pleased to work with NAIF in the development of the Kidston Stage 2 project,” Mr Harding said.
“The issuance of the term sheet and NAIF’s support to negotiate the detailed terms of a long tenor, concessional loan which would secure the bulk of the project debt funding, is a significant milestone in the development of the project.”
Minister for Resources and Northern Australia Matt Canavan welcomed the announcement of a potential loan to the project.
“This is a reflection of the work going on to progress several significant projects across Northern Australia,” Mr Canavan said.
“At this stage, NAIF has not made a final decision on a loan for the Kidston project.”
Mr Canavan said the government recently amended the NAIF’s investment mandate to be more flexible about the types of projects it could invest in and the indicative term sheet issued by NAIF was a direct response to the Investment Mandate changes.
NAIF CEO Laurie Walker said the support would assist Genex to advance its discussions with other project counterparties and to prove up the project fundamentals.
“NAIF sees the project as important for the transition of the market to lower emission renewable energy sources, and the Board’s preparedness to consider a capital commitment to the size referred to in this announcement reflects the alignment of this type of project with NAIF’s objective to contribute to the transformation of Northern Australia through infrastructure development.”
The project is one of several progressing through the various stages required before approval.
There are currently 97 active projects in the NAIF pipeline, with 18 projects in the due diligence phase.