The board of the Northern Australia Infrastructure Facility (NAIF) has given final approval to a $610 million facility of “concessional finance” for the 250MW, 2000MWh Kidston pumped hydro storage facility proposed by Genex for north Queensland.

The commitment by NAIF is a huge boost for Genex as it will account for all the financing needs for the world-leading project, which will co-locate the 250MW pumped hydro facility, with about eight hours of storage, with an existing 50MW solar farm and a planned second stage 270MW solar farm.

Genex has already secured off-take contracts with EnergyAustralia, which will also own half the pumped hydro part of the project, as well as connection agreements with the Australian Energy Market Operator, and now expects to reach financial close by the end of September.

Japan pumped hydro company J-Power is providing $25 million to provide the equity share required of Genex, and will take a stake in the company. EnergyAustralia will provide its own equity contribution.

“The decision by the NAIF Board in providing its Investment Decision approval is a further indication of the significance of Genex’s K2-Hydro project for northern Australia,” CEO James Harding said in a statement.

“We have been gaining momentum with this project over the last few months and are confident that, given the status of discussions with the various relevant stakeholders in the project, Genex will be in a position to reach financial close before 30 September this year.”

Laurie Walker, the outgoing CEO of NAIF, noted that the commitment to the Kidston project amounted to 12 per cent of NAIF’s total $5 billion facility.

“Energy storage facilities have a significant role to play in Australia’s transition to a low emissions, low cost energy future,” she said in a statement.

“The project will provide Far North Queensland with 250MW of firm, dispatchable energy, improving energy reliability while lowering transmission losses and electricity prices.

“The conditional support NAIF provided to the Project last year acted as a catalyst bringing confidence to Genex’s investment which unlocked other support for the project, helping move the project forward. Over 500 jobs will be created during the construction of this project and associated infrastructure. NAIF has a vital role in delivering infrastructure, creating jobs, growth and public benefit in northern Australia.”

The final go-ahead now seems certain, but the last piece of the puzzle will be a new high-voltage transmission link to the project from the main transmission line. Powerlink is currently finalising that investment and the state government may add its support as part of its focus on new clean energy hubs.

Genex also recently raised $16 million for its 50MW Jemalong solar project in NSW from institutional shareholders and is raising up to $9 million from retail investors.

NAIF, meanwhile, is also considering an investment in the Copperstring transmission line that would link Townsville to Mt Isa and unlock numerous large scale wind and solar projects, including the proposed Kennedy Energy Park that will combine wind, solar and battery storage, and could total 1200MW with the right transmission infrastructure.

NAIF is also believed to be considering funding a new transmission link in the Pilbara that will allow for the construction of a 60MW solar farm to help power and reduce costs for some of the huge iron ore mining projects in the region.