Inspiration from North Queensland!

Genex is textbook solar power funding

By Paul Raftery

We live in a connected world. As we work on EOI (Expression of Interest) for a solar power project in Argentina a “new message” box runs across the bottom of the screen. It was Primary Markets.com (www.primarymarkets.com/custom/genex/homepage) with an update on Genex Power Limited (ASX:GNX) (www.genexpower.com.au).

Genex is one of the great unsung Australian success stories. It is a textbook funding of solar power to pumped storage.

Genex’s story is as a listed Australian public company it is developing pumped storage hydro integrated with large scale solar. The marketing hype is that they are providing “Renewable Energy on tap”.

Located in north Queensland with cheap land a large scale pumped storage facility makes prima facie sense. It is in three stages

1)      50 MW of solar collection - Storage of sufficient water to generate 2,000 MW over 8 hours

2)      250 MW of solar

3)      The early stages of a 150MW wind farm.

Adding wind at a later stage reminded me of Tabatinga’s (see www.tabatingasg.com) opportunity in Argentina.

The Queensland State Government Power Purchase Agreement (PPA) is the classic financing model.

The Kidston project is ideally located in the area with the highest level of solar irradiance in Australia butr also close to existing power infrastructure. (a 132kV transmission line).  (see https://www.genexpower.com.au/uploads/6/6/1/2/6612684/corporate_presentation_april_2019__print_out_.pdf). The pumped hydro used the voids created by the mine. The voids were 52ha and 54 ha).

The team at Genex ticketed the right boxes

The first 50MW project:

1)      20 year support deed with Queensland State Government

2)      first-tier suppliers & contractors  : UGL, AECOM, First Solar, NEXTracker, SMA)

3)      30 year project life.

The second 250 MW project

1)      Critical Infrastructure Designation – Queensland State Government

2)      Up front funding from  ARENA – Australian Government- (AUD 9m)

3)      Project finance from the Northern Australian Infrastructure Fund

4)      A great team with solid names

a.       50% JV partner equity – Energy Australa

b.       Feasibility completed by Entura

c.       EPC contractor - McConnell Dowell & John Holland

d.       Engineering consultants Mott MacDonald and GHD

e.       International hydroelectric turbine supplier ANDRITZ

Genex has other assets in Jemalong solar (50MW) and the proposed Kidston Wind (150MW).

The project is not only technically strong and well financed, it enjoys a positive media profile but for investors it is well covered by leading brokers (see https://www.genexpower.com.au/broker-reports.html). It is covered by Baillieu, Morgans, Euroz and Canaccord Genuity not to ignore Primary Markets.

Whilst it is textbook, it has been and will be repeated in other solar and wind power projects in Asia, Latin America and elsewhere, nevertheless the three founders have done a great job. Congratulations to Simon Kidston, Michael Addison and Ralph Craven – you delivered and clearly plan to continue.   

Paul Raftery