Genex refinances solar farms to help it cash in on high spot market prices

Renewable energy and storage developer Genex Power has announced a refinancing manouevre that it will allow it to retain a higher proportion of cash generated by its operating solar portfolio, including the consistently high performing Kidston solar farm in Queensland.

In a statement on Wednesday, Genex said it had entered into an agreement for a new $16 million subordinated debt facility with Infradebt for the 50MW Kidston project in Queensland’s Far North, and the 50MW Jemalong solar farm in central New South Wales.

Genex says the proceeds of the new debt facility will be used to refinance the existing subordinated loan the company had with the Clean Energy Finance Corporation, allowing Genex to make the most of high wholesale electricity prices.

As it notes in the announcement, Jemalong is 100% exposed to both merchant electricity and large-scale generation certificate prices in NSW, while Kidston benefits from a price floor mechanism under its Solar 150 Support Deed with the Queensland government.

“These arrangements have allowed both projects to benefit from recent market pricing which is anticipated to contribute to a strong financial performance for Genex for FY2022,” the company said.

“The company notes that the recent elevated spot market pricing is expected to continue for some time and believes the KS1 and JSP projects are well positioned to benefit from these pricing conditions.”

Genex’s Kidston solar farm, as noted above, consistently ranks highly in Rystad Energy’s monthly review of solar farm performance, including in April when it recorded a capacity factor of 26.4% for the month. It also topped the chart in June – mid-winter.

Kidston, installed next to the former gold mine of the same name that will host a pumped hydro project, also got a special mention from owners Genex, in February, for performing well over summer despite the La Niña conditions.

The company says the enhanced cash flows from its solar portfolio will be used to fund its ongoing portfolio development activities, including its flagship 250MW Kidston pumped storage hydro project and the 50MW/100MWh Bouldercomb battery project.

Genex in February secured a $35 million debt facility, also from Infradebt, to fund the construction of the Bouldercombe battery in Rockhampton, Queensland.

“These cash flows will be used to fund the costs associated with the company’s portfolio development activities – enabling the company to fast track its pipeline and deliver on its strategy of becoming the leading renewable and storage development company in Australia,” said Genex CEO James Harding on Wednesday.

“This transaction has also consolidated the strong working relationship developed over the past 6 months with Infradebt which began with the issuance of a long-term debt facility for Genex’s 50MW/100MWh Bouldercombe Battery Project.”