Genex Power Limited has entered into a series of agreements with Electric Power Development Co., Ltd. and one of its subsidiaries, JPGA Partners Pty Ltd (collectively, J-POWER), for a total funding package of $44.5 million.
The fund will be used to fill the Kidston Pumped Storage Hydro Project (K2-Hydro) contingency, the development of the multi-stage up to 2GW Bulli Creek Solar and Battery Project (BCP), and general operating capital.
According to Genex, as it expands its portfolio of renewable energy generating and storage assets in Australia, the funding package reaffirms its strategic partnership with J-POWER.
“Today’s structured funding package totalling $44.5 million demonstrates the deepening of an already strong relationship between Genex and J-POWER,” Genex CEO James Harding said.
Corporate Loan Facility
Genex has entered into a Corporate Loan Facility Agreement with J-POWER for a $35 million facility loan (Facility). Following the announcement of the water ingress incident at K2-Hydro and related financial consequences on 9 November 2022, Genex will primarily use the Facility to offer an extra standby funding source for the K2-Hydro contingency. While it may not be required, replenishing the K2-Hydro contingency is deemed prudent to assure the project is successfully delivered in conjunction with its planned energisation next year. The Facility will be used to replace general working capital as well.
The Facility, which has a maturity date of 31 December 2026, is secured by Genex’s equity interests in the BCP and the 258MW Kidston Stage 3 Wind Project.
“While the costs of the water ingress event at the Kidston Pumped Storage Hydro Project last year 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. The Loan Facility with J-POWER gives us significant buffer to complete the construction of the project and provides a non-dilutionary, cost-efficient means of securing this funding,” Harding stated.
Joint Development Agreement for BCP
Genex and J-POWER have signed a joint development agreement (JDA) for the BCP, with J-POWER providing $2.5 million in upfront acquisition funding and $6 million for third-party development expenditures. Genex will repay half of this at the time of financial close. After the initial funding has been utilised, Genex and J-POWER will split third-party development expenditures 50:50. The partnership includes the Kidston Stage 3 Wind Project and the 2GW multi-stage solar and BESS project.
“In addition to the Loan Facility, 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. Given the scale at Bulli Creek, we are pleased to welcome JPOWER as our co-development partner which will not only provide important development funding, but also de-risk the equity financing of each stage of the project through bringing significant power sector capability and balance sheet strength to the partnership,” Harding said.
Development Funding Agreement
Genex signed a Development Funding Agreement (DFA) with J-POWER to help fund the BCP’s development. J-POWER will provide $1.0 million to Genex under the DFA to cover the Company’s internal expenditures related to the BCP development workstreams.
“This funding will be instrumental in fuelling the growth of our renewable energy portfolio in Australia. On behalf of Genex, I would like to thank J-POWER for their continued support of the Company and its strategy. This collaboration reaffirms our commitment to expanding the reach of sustainable energy generation and storage assets, and together we will continue to focus on leading Australia’s transition to a clean energy future,” Harding added.
