Australia’s first renewable energy project to combine solar energy and pumped hydro storage has been given conditional approval for $500 million in funding.
The Northern Australian Infrastructure Facility (NAIF) is planning to provide $516 million for the Kidston solar project near Georgetown in far north Queensland.
The company told the share market that the NAIF board “expressed its support” for the expansion.
If approved, it would be one of the largest loans made by the NAIF.
Once built, the project would be the first in Australia to combine solar energy and pumped hydro storage.
Genex Power executive director Simon Kidston said a loan would be a significant step for the company as it develops the project’s second phase — a 250 megawatt pumped storage hydro project that’s fully integrated with an expanded solar farm.
“All of the energy from the solar farm is used to pump the water from a lower reservoir to a higher reservoir, then we can release that water and generate power at peak demand.”
Mr Kidston said it has taken NAIF six months to assess the company’s application for a loan.
“They did take their time to understand the risks, understand the opportunities,” he said.
“I think they worked through in a very methodical and professional way, so full credit to NAIF for that.”
The funding is subject to several conditions, including due diligence and a cost-benefit analysis.
State-owned energy corporation Powerlink is planning a 125-kilometre transmission line to run from the Kidston Solar power project, 200 kilometres west of Townsville, to connect with the national grid at Mt Fox.
Landholders previously raised concerns about potential biosecurity issues during construction, as well as the impact on cattle station management.
Genex Power is also in discussions with banks about providing the rest of the funding needed for the project.
Mr Kidston said once complete, the project would provide reliable energy to the country.
NAIF chief executive Laurie Walker said the project would provide substantial benefits to Northern Australia.
“NAIF sees the project as important for the transition of the market to lower emission renewable energy sources,” she said.
The NAIF would provide a long-term debt facility for more than 20 years, at concessional interest rates.
The NAIF has previously announced $16.8 million in funding for the Onslow Marine Support Base in Western Australia and $7.18 million for a barramundi farm in the Northern Territory.
Federal Minister for Northern Australia Matt Canavan also welcomed the progress, but said the funding was not guaranteed yet.
“The NAIF board has not yet made an investment decision, nor has it given any commitment for financial assistance,” he said.
Senator Canavan said the potential loan was a direct result of recent changes to the NAIF’s investment mandate to make it more flexible, and several other projects were also being considered.
“There are currently 97 active projects in the NAIF pipeline, with 18 projects in the ‘due diligence’ phase,” he said.
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