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Genex signs binding Energy Storage Services Agreement with EnergyAustralia


Genex Power Limited is pleased to announce that it has finalised its off-take arrangements for the 250MW Kidston Pumped Storage Hydro Project (K2-Hydro or the Project) with the signing of a binding Energy Storage Services Agreement (ESSA) with EnergyAustralia Pty Ltd (EnergyAustralia). A summary of the key terms of the ESSA is below:

  • A term of up to 30 years, with an initial term of 10 years and two options (at EnergyAustralia’s election) to extend for a further 10 years each (Extension Options);
  • Genex will provide the full operational dispatch rights for the K2-Hydro plant (including P&L responsibility) to EnergyAustralia in exchange for a fixed annual rental payment, escalating over the total term;
  • Following the expiry of the full 30-year term and therefore conditional on the exercise of the Extension Options, EnergyAustralia shall have the right to acquire Genex’s shareholding in Kidston Hydro project for a fixed cash payment; and
  • The ESSA is subject to a number of conditions precedent, including achieving financial close for Kidston Hydro project, which must be satisfied prior to the financial close sunset date of 31 December 2020.

Genex remains deeply engaged with the other Project stakeholders, including the Northern Australia Infrastructure Facility (NAIF) to complete the restructuring of the project financing on the basis of the agreed terms of the ESSA. Following announcement, and subject to agreeing suitable terms with NAIF and Queensland Government, Genex is now seeking to reach financial close on the Project in the third quarter of the 2020 calendar year. The Company will continue to keep the market informed of developments in relation to this timetable as appropriate.

Commenting on announcement, Genex CEO, James Harding stated:

“Since November 2019, Genex has been actively working with all of its project stakeholders, including EnergyAustralia, NAIF and the Queensland Government, to complete the restructuring of the project financing for K2-Hydro and progress to financial close as quickly as possible.

We have been extremely pleased with the support of our stakeholders and counterparties during this period and now believe, with today’s signing of the ESSA with EnergyAustralia, that we have the basis to move forward to financial close of the Project.

The K2-Hydro project will be the first pumped storage hydro project in the National Electricity Market in almost 40 years, and the first to be developed under private ownership. It will create over 500 jobs during construction and deliver significant economic benefits to Queensland through providing reliable generation for the grid and applying downward pressure on wholesale electricity prices. We look forward to keeping the market informed as we progress toward financial close, and to commencing construction at Kidston later this year.”

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