Five major banks have shown Resources Minister, Keith Pitt to be a dud financial and energy analyst in organising the retrospective investment of $280 million into a huge wind farm and battery hub in north Queensland.
In May Mr Pitt vetoed public funding of the wind farm and battery project at Kaban in far north Queensland, describing it is ‘inconsistent with the objectives and policies of the Commonwealth’.
His decision reversed an earlier approval and attracted considerable controversy as many in the renewables sector saw it as a sop to the Queensland coal mining sector and made for political reasons.
But the Queensland government stepped in with support for the project and upgrading of the Powerlink transmission line and other facilities and the French company behind it continued talking to banks about finance and the Queensland government.
The Kaban green energy hub was scheduled to be constructed at a location 80 km south-west of Cairns. The Federal Government agency, Northern Australian Infrastructure Facility (NAIF) had previously approved $280 million in funding for the initiative to go ahead.
Project promoter, Neoen Australia had estimated this would deliver up to $461 in electricity savings for consumers in far North Queensland for the duration of the project, which had initially landed them approval for public funding.
The project was set to include a 157-megawatt (MW) wind farm and 100 MW battery, a 320km transmission line upgrade and 247 jobs during construction as well as five ongoing positions.
Mr Pitt retrospectively reviewed the proposal, and delivered a rejection notice to NAIF chief executive Chris Wade that effectively killed off the reversed the approval.
“I am satisfied that providing the financial assistance would be inconsistent with the objectives and policies of the Commonwealth Government,” he wrote.
“Therefore I am issuing a rejection notice in relation to the Kaban Green Power Hub proposal notice.”
Mr Pitt said in a statement his decision was based on the fact that “The project will not provide new reliable, dispatchable and firm generation capacity to the National Electricity Market and that he was not convinced that the project will result in lower energy prices.”
On Monday, the National Australia said issued a statement revealing that it had decided to help lend a total of $370 million to fund the project.
NAB is the only Australian bank providing project finance for global renewable energy power producer Neoen (a French company) to build a $370 million wind energy hub in Far North Queensland.
Other banks in the financing group include global giants such as HSBC, MUFG of Japan and BNP Paribas plus Nord/LB of Germany.
The project is backed by a 15-year capacity purchase agreement (CPA) with CleanCo, Queensland’s publicly owned clean energy company, for 100% of the energy generated. It will deliver competitively priced electricity, contributing to the Queensland Government’s target of 50% renewable energy by 2030.
In the statement, NAB Group Executive of Corporate & Institutional Banking David Gall said the bank is proud to partner with Neoen and invest in clean energy wind projects that benefit Queenslanders.
“This is a beautiful part of the world with excellent natural wind resources. We are proud to support this project, creating new jobs and diversification opportunities for this region,” Mr Gall said.
“We’re very fortunate in Australia to have an abundance of wind and solar resources. It is expected this particular wind farm will generate enough electricity to power around 100,000 homes once completed in 2023.”
“NAB supports the transition to a low carbon economy and the delivery of secure, reliable and affordable energy. Over 70% of our lending in energy is in renewables across over 140 projects. We have financed more renewable energy projects than any other Australian bank,” Mr Gall said.
NAB says it has now financed more than $11 billion across 145 transactions in the renewable energy segment since 2003.