Hazer updates on ARENA funding agreement for hydrogen project

Hazer updates on ARENA funding agreement for hydrogen project

Australian hydrogen producer Hazer Group has today provided additional information relating to the news on 16th March that it had been awarded more than $9m from ARENA for its Hazer Process Commercial Demonstration Project in Western Australia.

Under the funding agreement, Hazer said it is eligible to receive milestone funding payments of up to $7.9m in three tranches during the capital construction phase of the project subject to meeting defined key design, contracting, construction and commissioning milestones.

Read more: Hazer awarded ARENA funding for hydrogen project

The milestones are:

Tranche 1 ($2.22m) – Detailed Design and Long Lead Items Procurement – satisfaction of deliverables including provision of initial detailed design to support an EPC contract, a safety management plan, an executed EPC contract and executed contracts for material scope items.

Tranche 2 ($1.77m) – Completion of Site Civil Works – satisfaction of deliverables including evidence that site civil works are complete and confirmation from approval authorities that the work complies with development approvals for the site.

Tranche 3 ($3.92m) – Completion of Construction and Commencement of Commissioning – satisfaction of deliverables including evidence that the plant has reached practical completion, provision of a commissioning plan, evidence that all relevant approvals have been obtained to operate the plant and provision of a Hazard Study.

Hazer said it will also be eligible to receive milestone funding payment of up to $1.5m in three annual tranches during the operational phase of the project (currently projected to commence from commissioning in the first quarter of 2021).

Each of these three tranches has a maximum amount of $500,000 or 41.5% of Operating Losses for the Project during each assessment period.

Eligibility for each trance will require Hazer to complete various reporting deliverables on the learnings and outputs of the project as it completes each year of the planned three-year operating phase.

Hazer said the agreement can be terminated by ARENA under various circumstances including; if the conditions precedent are not satisfied by the CP Satisfaction Date being 30th June 2020, if there is a Material Breach of the Agreement (which is not remedied within 10 Business Days or some other time agreed with ARENA), or in the case of an insolvency event.

The items defined as a Material Breach and other terms relating to Termination are considered to be usual for an agreement of this nature.

Geoff Ward, Hazer Group Managing Director commented, “We are delighted to have completed this agreement with ARENA and continue to progress design, permitting, procurement and commercial activities to maintain the substantial progress we have made in the past 12 months.”

“The ARENA agreement represents an outstanding foundation for the project, with fair terms, and building on ARENA’s substantial experience in successfully managing grant programs to support innovative renewable energy projects.”

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