Genex Power says it has resumed work on the main access tunnel of its flagship pumped hydro storage project in north Queensland, as the bidding consortium led by Atlassian software billionaire Scott Farquhar continues to assess its target.
Genex last month revealed geological problems at the pumped hydro project, located in an abandoned open pit gold mine, and particularly in the tunnelling involved for the water to be pumped up to an upper reservoir and then flow down through turbines.
The company insists that the problem has been resolved and will not cause delays to the 250MW/2,000MWh Kidston Pumped Storage Hydro Project, but has flagged that the whole venture could run up to $15 million over budget.
That appears to have created food for thought for the bidding syndicate led by Farquar’s Skip Essential Infrastructure Fund and supported by US investor Stonepeak Capital, who have offered 25c a share but not yet completed due diligence.
The pumped hydro project is crucial to Genex’s plans to add up to 258MW of wind capacity, and expand the existing 50MW solar farm at Kidston to create a truly hybrid wind, solar and storage project that could underpin the grid in the northern part of the state.
Its progress is being watched with interest by the industry, and particularly the potential investors in a number of other pumped hydro projects scattered around the grid. The Snowy 2.0 pumped hydro project is also running well over budget, and facing big delays after one of its contractors had to be bailed out by its partner.
At the company’s AGM last week, chairman Ralph Craven said the bidding consortium is continuing to do work and engage constructively with Genex and its advisers at this time, but no binding or final proposal had been made.
“There is no certainty that the Consortium will provide a final or binding proposal to the Board that is capable of being recommended to Genex Shareholders or that the Proposed Scheme (or any other transaction in relation to Genex and the Consortium) will proceed,” he said.
There is no further update to be provided today and I am unable to field any questions in relation to the status of the Proposed Scheme beyond what has already been disclosed.”
Genex shares have fallen well below the bid price to just 16c.
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