Australia's Genex Power secured a government loan of up to A$610 million ($462.69 million) for its Kidston pumped hydro project, the company said on Tuesday, adding that it would start construction by the first quarter of next year.
The loan is a lifeline for the project, which had been left in the lurch in November last year when funding fell through after it failed to sign a power sale agreement for the plant.
In March, Genex lined up EnergyAustralia, a unit of Hong Kong's CLP Holdings and Australia's third-largest energy retailer, to buy power from the project.
The loan, which will be provided by the government's A$5 billion Northern Australia Infrastructure Facility, is based on the final terms of the EnergyAustralia agreement, whose financial close has been pushed to February 2021.
Genex shares rose over 5%, compared with a 0.5% drop in the broader Australian market.
Pumped hydro acts like a giant battery, pumping water uphill when energy is abundant and releasing it to create power at night or on a windless day.
Genex's 250 megawatt Kidston pumped hydro project is being built at an abandoned gold mine in the state of Queensland, and if successful, could become a template for similar projects in abandoned mines and dams all over Australia.
($1 = 1.3184 Australian dollars)
(Reporting by Arundhati Dutta in Bengaluru; editing by Uttaresh.V)
