Tuesday, April 20, 2021
Renewable Energy News

Forrest and Fortescue make big splash in PNG hydropower – The Australian Financial Review

By Staff , in Hydropower , at September 1, 2020

Mr Muthuvel has estimated the Purari River scheme and other projects on Fortescue’s radar could eventually generate 25 gigawatts of power a year.

Dr Forrest and a Fortescue team that includes deputy chief executive Julie Shuttleworth have been in PNG since last week looking at investment opportunities.

The trip follows a Fortescue visit to the troubled copper- and gold-rich island of Bougainville last year.

Exploring export markets

In a non-price sensitive statement to the ASX, Fortescue said its wholly owned subsidiary Fortescue Future Industries had signed a deed of agreement with PNG and state-owned Kumul Consolidated Holdings Limited.

Fortescue said it would investigate the feasibility of developing hydro power resources and other industries largely for export to global markets and also for domestic consumption.

We must look at these opportunities not simply as business deals, but as a new way to industrialise our country.

— James Marape, PNG Prime Minister

The $53.6 billion company said that subject to feasibility studies and approvals, projects would be developed by its subsidiary, with ownership and project finance sources to be separately secured without recourse to Fortescue.

Advertisement

PNG said the agreement secured a partnership that would seek to develop the country’s hydro power resources to support “green industrial operations for domestic consumption and export to international markets”.

Mr Marape urged local land owners and other stakeholders to engage openly with Fortescue.

“We must look at these opportunities not simply as business deals, but as a new way to industrialise our country,” he said.

“We have a chance to lead the world in environmentally sustainable industries that will create mass employment for our people, opportunities for our future generations, value for impact communities, and a diversified revenue stream for local and national government.”

The agreement with Fortescue comes as the PNG economy is reeling from the COVID-19 pandemic and with a cloud over the future of some of its biggest copper and gold mines.

“COVID-19 has presented many challenges to my government and our economy in 2020,” Mr Marape said.

“However, I am greatly encouraged that despite these challenges, PNG still represents significant investment potential for a major multinational like Fortescue.”

Advertisement

It is understood Dr Forrest and Fortescue have been in discussions with the PNG government for a number of months.

Dr Forrest, the Fortescue founder and chairman, could not be reached for comment.

Mr Muthuvel, who led the PNG negations with Fortescue, said he was determined to make the deal stick and deliver results.

“I will ensure that we actively progress major projects with Fortescue and that this is not just another agreement with intentions that never materialise or just harms PNG’s international reputation,” he said.