Renewable energy for Pilbara one step closer following NAIF loan

The Northern Australia Infrastructure Facility (NAIF) has made an Investment Decision to provide a loan of up to $90 million to develop the Chichester Solar Gas Hybrid Project in the East Pilbara, Western Australia.

NAIF’s Investment Decision to Alinta Energy Pty Ltd (Alinta) will support the renewable energy Chichester Solar Gas Hybrid Project (Project).

The project will see Alinta build a 60 MW Solar PV power station, transmission infrastructure, switchyards and substations to supply electricity to Fortescue Metals Group Ltd’s Chichester Hub iron ore mining operations, which comprise the Cloudbreak and Christmas Creek mines. These mines are currently powered by standalone diesel generators.

NAIF Chief Executive Officer Laurie Walker said: “This $90 million NAIF loan to Alinta Energy will help provide low emission renewable energy generation for large off grid customers and paves the way towards the creation of a more interconnected regional energy grid in the Pilbara. The project innovatively combines solar and gas fired power to compensate for the variability of solar sourced energy. This investment by NAIF offers the opportunity to make a long-term difference to the Pilbara.”

The Project is an important step in the development of a broader interconnected network across the Pilbara with the potential to improve accessibility, efficiency, reliability and costs across the region for both businesses and residents.

Around 200 jobs are expected to be created during construction. An independent cost benefit analysis by Deloitte Access Economics of the Project estimated net public benefit of $221 million including diversification of generation capacity which increases security of supply. There is also potential for new mining operations, regional communities and pastoral stations to access electricity generated through the Project.

Through its Indigenous Engagement Strategy, a requirement of NAIF investment, Alinta has committed to targets of 3 per cent employment (project labour hours) and 3 per cent procurement, supported by an Indigenous Participation Plan that EPC Contractors working on the Project must comply with.  Alinta will also invest in a range of strategies to support Indigenous opportunities in business development, subcontracting, training and education throughout the operational phase of the Project.

NAIF has made six Investment Decisions for projects in Western Australia. In total, across northern Australia NAIF has committed to $1.4 billion in investments, supporting projects forecast to create more than 4,000 jobs and more than $2.9 billion in public benefit.

The loan by NAIF to Alinta Energy is subject to final documentation and conditions precedent to drawdown, subject to ratification from the Western Australian Government. The NAIF loan will be drawn during the approximate 18-month construction of the Project which is expected to commence before the end of the year. ARENA is also contributing $24.2 million in funding to the project.

Notes to Editors

The Northern Australia Infrastructure Facility (NAIF) is a Commonwealth Government $5 billion lending facility to finance projects via the governments of the Northern Territory, Queensland and Western Australia to achieve growth in the economies and populations of northern Australia and encourage and complement private sector investment in northern Australia.

Projects supported by NAIF are diversified across sectors including ports, roads, airports, tourism, education, agriculture, resources and renewable energy.

NAIF has committed to $1.4 billion in investments across Northern Australia as a whole, supporting projects forecast to create more than 4,000 jobs and more than $2.9 billion in public benefit.

NAIF investments by jurisdiction:

• $781 million for Queensland across four projects,
• $345 million for the Northern Territory across four projects including the current conditional approval; and
• $288.3 million for Western Australia, across five projects, excluding the Pilbara Minerals Investment Decision which will not proceed to financial close in its current form.