Genex Power has struck a new agreement with Japanese utility J-Power that renews its interest in buying ab equity stake in the Kidston Pumped Storage Hydro project, subject to a new off take agreement being sealed.
In June, J-Power had agreed to make a $25 million equity investment in the pumped-hydro project, giving the company up to a 19.99% stake in the Genex company.
However, that agreement was contingent on Genex achieving certain milestones before the end of 2019, but the company revealed at the beginning of November that it had encountered delays, largely due to the decision by EnergyAustralia to renegotiate its off-take deal.
That move by EnergyAustralia put both the J-Power agreement, and financing from the Northern Australia Investment Facility (NAIF) at risk, but after securing an extension to the NAIF backing, Genex said on Friday it has secured the same with J-Power.
“We are delighted that J-Power has shown faith in Genex and our K2-Hydro project with the execution of this MOU and to continue discussions along the lines of those originally announced in June this year,” Genex CEO James Harding said in a statement.
“We will work as quickly as we can to conclude arrangements with J-Power as part of the restructuring of the K2-Hydro transaction with a view to reaching financial close for the project as soon as possible in 2020.
“Along with the decision by the NAIF Board to extend the offer of funding for the K2-Hydro announced last week, we are maintaining the momentum we had previously established into the new year.”
The Kidston pumped-hydro project up to 250MW and eight hours of energy storage capacity, using two disused gold mine pits. The project ran into trouble after Australian utility EnergyAustralia, sought to delay the execution of a previously announced off-take agreement with the project.
The project will be co-located with 270MW of solar generation and 150MW of wind capacity. The first stage of the project, a 50MW solar farm, was completed in late 2018.
This delay has forced Genex to renegotiate contracts with other project partners, including J-Power, as a prior deadline to achieve a financial investment decision before the end of 2019, has been pushed into 2020.