The deal follows the collapse of negotiations between the two last year which put Genex’s dealings with the Northern Australia Infrastructure Facility for a crucial loan on hold.

The State Government has already given its commitment to the project which is expected to generate about 500 jobs. The deal follows the announcement last week of a massive $1.9 billion 1GW wind farm in southern Queensland by Acciona and the State Government.

Genex said the deal with a significant step towards financial close for the 250-megawatt, pumped storage scheme. Genex had been granted NAIF approval for a $600 million loan, but it was subject to financial close.

That evaporated when Energy Australia withdrew. The new deal with EnergyAustralia is for up to 30 years, with an initial term of 10 years with Energy Australia holding two options to extend for a further 10 years each.

Genex will provide the full operational dispatch rights for the K2-Hydro plant to Energy Australia in exchange for a fixed annual rental payment, escalating over the total term. Following the expiry of the full 30-year-term EnergyAustralia will have the right to acquire Genex’s shareholding in the project for a fixed-cash payment.

Genex said it was “deeply engaged” with the other project stakeholders, including the NAIF to complete the restructuring of the project financing. It said it was now seeking to reach financial close on the project in the third quarter of the 2020 calendar year.

Genex chief executive James Harding said the K2-Hydro project would be the first pumped storage hydro project in the National Electricity Market in almost 40 years and the first to be developed under private ownership.

“It will create over 500 jobs during construction and deliver significant economic benefits to Queensland through providing reliable generation for the grid and applying downward pressure on wholesale electricity prices,” he said.

“We look forward to keeping the market informed as we progress toward financial close, and to commencing const