Secured financing locks Marinus Link in, with contractors given go ahead
Last year, supply contracts were signed with Italian cable manufacturer Prysmian Powerlink. (Prysmian Group)
In short:
Last month, the Australian, Tasmanian and Victorian governments made a positive final investment decision on the first stage of the Marinus Link project.
The $5 billion project will connect Tasmania and Victoria via 255 kilometres of undersea cable, enabling greater energy trading between the states.
What's next?
The project has passed two major milestones, with financing locked in and suppliers ordered to start production on key components, with overall completion expected by 2030.
The Marinus Link undersea power cable project has passed two major milestones, with financing locked in and suppliers ordered to start production on key components.
Australia's Clean Energy Finance Corporation (CEFC) has agreed to provide $3.8 billion worth of concessional loans, which Marinus Link chief executive Stephanie McGregor said would save customers $900 million over the first five years of the project's life.
"The ability to access the concessional loan through the CEFC enables Marinus Link to deliver this critical infrastructure at the lowest possible cost to consumers,"Ms McGregor said.
Last month, the Australian, Tasmanian and Victorian governments made a positive final investment decision on the first stage of the high-voltage cable, which would expand the capacity to trade energy across Bass Strait.
Loading...The three governments have made equity contributions totalling 20 per cent of the project's $5 billion total cost, while the money provided by the CEFC will be paid back through energy bills.
CEFC chief executive Ian Learmonth said this arrangement would reduce the impact of Marinus Link on transmission costs by 45 per cent.
Construction is planned to begin next year, with hopes of completion by 2030. (Supplied: Marinus Link)
Last year, contracts were signed with Italian cable manufacturer Prysmian Powerlink, and with Hitachi Energy for the project's converter stations.
As a result of locking in financing with CEFC, the two companies have been given notices to proceed, meaning engineering work and pre-construction activities can begin.
Construction is set to begin next year and expected to be complete by 2030.
Governments backing the project claim it will drive $2.4 billion worth of investment across Tasmania and Victoria, and see power bills fall by an average of $25–36 a year.
The Tasmanian government faced criticism over the transparency around the final investment decision, which was made while caretaker arrangements were in place.
Opposition and crossbench members were offered briefings on the condition they did not publicly share details of the business case, and were given just days to endorse it, which Labor did not.