Genex secures new finance to shore up pumped hydro and fund big battery plans

Genex Power has announced a major new funding deal to bring home its flagship pumped hydro project at Kidston in Far North Queensland and drive development of the massive up to 2GW Bulli Creek solar and battery project.

The $44.5 million funding package was announced on Friday by Genex and J-Power, the Japanese utilities giant that has been collaborating with Genex on the Kidston Clean Energy Hub since 2020, including through a previous $25 million investment commitment for K2-Hydro.

This time around, J-Power has agreed to provide a loan facility of $35 million as additional standby source of funding for the 250MW, eight hour storage (2,000MWh) pumped hydro project, to help ensure it remains on track for energisation in 2024.

The hope is that the standby funds will not be needed, but Genex says that – following a September 2022 drilling incident that caused a water ingress and “modest delays” to works – they will act as “a significant buffer” to any further bumps in the road.

“While the costs of the water ingress event … 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,” Genex CEO James Harding said on Friday.

On top of the loan facility, J-Power will also establish a joint development fund for Genex’s up to 2GW of battery storage and solar capacity at the Bulli Creek project in Queensland’s Toowoomba region, where it plans first to build a 400MW battery with two hours of storage.

The joint development agreement gives J-Power a 50% interest in Bulli Creek, through upfront acquisition funding of $2.5 million, and a further $6 million in upfront funding for third party development costs and $1 million to cover early costs of the project.

Ongoing third party development costs for Bulli Creek will then be funded by both companies on a 50:50 basis, extending the strategic partnership initiated via co-development of the 258MW Kidston Stage 3 wind project.

The facility is secured against Genex’s equity interests in Bulli Creek and the Kidston wind farm.

“This funding will be instrumental in fuelling the growth of our renewable energy portfolio in Australia,” says Harding, who hands over the reins as CEO of Genex in Spring, to current CFO Craig Francis.

“The loan facility with J-Power gives us significant buffer to complete the construction of the [Kidston pumped hydro] project.

“In addition … 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.”

Earlier this week, Genex began energisation of its first energy storage facility, a 50MW/100MWh Tesla big battery  in Bouldercombe near Rockhampton in Queensland – a project it says has been built on time and on budget.

Energisation of the Bouldercombe battery marks the final milestone before a lengthy commissioning process which is set to be complete by October, in time for Queensland’s summer demand peaks.

As RenewEconomy has reported, this is a big deal for Genex, with the Bouldercombe BESS – only the second large-scale energy storage system to be installed in the Sunshine State – expected to become the company’s next big earner.