Genex Power Limited has entered into a series of agreements with Electric Power Development Co., Ltd and one of its subsidiaries, JPGA Partners Pty Ltd (together, J-POWER) worth $44.5 million which will support its renewable energy projects.
The funds will replenish the contingency for the 250MW/2,000MWh Kidston Pumped Storage Hydro Project (K2-Hydro), the development of the multi-stage up to 2GW Bulli Creek Solar and Battery Project (BCP) and for general working capital.
Following the water ingress event at K2-Hydro and associated cost impacts announced in November last year, the funding will be mainly utilised to provide an additional standby source of funding for the project. While it may not be needed, it is considered sensible to ensure that the project is successfully delivered as scheduled next year.
Genex has entered into a joint development agreement with J-POWER for the BCP (JDA), under which J-POWER will earn a 50 per cent interest in the BCP by way of providing upfront acquisition funding of $2.5 million, and a further $6 million in upfront funding for third party development costs (with 50 per cent of this to be reimbursed by Genex at financial close).
Once the initial funding has been utilised, Genex and J-POWER will be contributing to third party development costs in connection with the BCP on a 50:50 basis. By entering into the JDA, Genex and J-POWER are extending the strategic partnership initiated with the ongoing successful co-development of Kidston Stage 3 Wind Project to include this up to 2GW multi-stage solar and BESS project.
Genex has also entered into a Development Funding Agreement with J-POWER to support the development of the BCP (DFA). Under the DFA, J-POWER will contribute $1 million to Genex to cover the company’s internal costs associated with the development workstreams for the BCP.
Genex CEO James Harding said: “While the costs of the water ingress event at the Kidston Pumped Storage Hydro Project last year have been fully funded, we consider it prudent that additional funding is secured against any further unforeseen events during the balance of the construction program.
“The Loan Facility with J-POWER gives us significant buffer to complete the construction of the project and provides a non-dilutionary, cost-efficient means of securing this funding.
“In addition to the Loan Facility, the Joint Development Agreement for the Bulli Creek Project will allow us to fast-track development activities at this exciting project, which represents the next phase in the company’s growth.
J-POWER, as the co-development partner, will not only provide important development funding, but also de-risk the equity financing of each stage of the project.
“This funding will be instrumental in fuelling the growth of our renewable energy portfolio in Australia.
“This collaboration reaffirms our commitment to expanding the reach of sustainable energy generation and storage assets, and together we will continue to focus on leading Australia’s transition to a clean energy future.”