- Genex told investors today it won’t reach an investment decision for its K2 Hydro Project this year and, as a result, won’t reach financial close
- K2 Hydro is a 250 megawatt project in Queensland which will generate, power, and store renewable energy
- The company has seen many highs this year, including funding of over $760 million cash made up of loans from J-POWER and NAIF and funding the Queensland Government
- However, due to not reaching a positive investment decision, these loans will lapse by New Year’s and will need to be renegotiated
- Following this news, Genex’s shares are down over 40 per cent, with shares trading for 16 cents
Genex Power has been working closely with Energy Australia (EA) to finish due diligence and finalise the terms of their agreement.
The companies entered a term sheet in December 2018, for a long term energy agreement and equity investment in the Kidston Pumped Storage Hydro Project (K2-Hydro).
Genex said today, however, that a positive investment decision for $635 million worth of loans will not be reached by the ending of the year — meaning these loans will lapse if they are not extended.
The K2 Hydro Project is a 250 megawatt project which is utilising an abandoned gold mine to generate, power, and store renewable energy.
So far this year, the company has achieved several major milestones.
These include a signed share subscription agreement of $25 million with electric power company J-POWER to provide Genex with the required equity.
Genex also received AEMO GPS Approval for K2 Hydro and, importantly, it received NAIF approval for a $610 million concessional loan on July 11.
In September Genex’s project gained further support from the Queensland Government who provided funding of $132 million.
Now, with Genex unable to come to a decision, the ball is in J-POWER and NAIF’s court as to whether the loan periods will be extended.
The company said it will have to continue working with the EA and other financiers to restructure the financing to ensure a positive investment decision is reached and a financial close is achieved in 2020.
Following this news, Genex’s shares are down 37 per cent, with shares trading for 17 cents at 2:13 pm AEDT.