Australia's Genex pumped hydro project funding falls through, shares tank
01/11/2019 06:25
Nov 1 (Reuters) - Australia's Genex Power Ltd GNX.AX on
Friday said it won't be able to line up funding for its pumped
hydro project until next year, after failing to sign a power
sale agreement from the project.
The setback knocked the small-capitalisation company's
shares down to A$0.165, off 39%, by 0615 GMT, having earlier
touched a more than three-year low with a drop of as much as
46%.
Under a preliminary agreement reached last December, Genex
had hoped to finalise a power purchase agreement in 2019 with
EnergyAustralia and sell an equity stake in the 250 megawatt
project to the country's no.3 electricity retailer. urn:newsml:reuters.com:*:nFWN1YO0WS
Genex said on Friday EnergyAustralia, owned by Hong Kong's
CLP Holdings 0002.HK , had advised that it could not agree to
the deal spelled out in the term sheet last December.
"In light of this development, Genex wishes to advise that
it no longer anticipates that it will reach financial close on
the project in calendar 2019," the company said in a statement
to the Australian stock exchange.
As a result of the EnergyAustralia setback, agreements Genex
reached for a total of A$635 million ($438.34 million) in
funding from the government's Northern Australia Infrastructure
Facility and Japan's J-Power 9513.T would both lapse in
December, Genex said. urn:newsml:reuters.com:*:nL4N24C0Y0 urn:newsml:reuters.com:*:nL4N23C4G7
Genex said it would work with the government fund, J-Power
and EnergyAustralia to restructure the financing, which it now
hopes to seal in 2020.
"There is more work to be done before we can commit
long-term," an EnergyAustralia spokesman said in emailed
comments, adding that the company hoped an investment decision
could be made "sometime next year".
The project, which Genex plans to build at an abandoned gold
mine in outback northern Australia, is seen as the most
promising of a range of pumped hydro projects. It would store
energy like a battery to back up variable wind and solar power.
urn:newsml:reuters.com:*:nL3N21U02E
($1 = 1.4486 Australian dollars)
(Reporting by Anushka Trivedi in Bengaluru
Editing by Sonali Paul and Kenneth Maxwell)
((Anushka.Trivedi@thomsonreuters.com; +918067491413;))