❓ A WA parliamentary question addresses concerns about the Albany Wave Farm project's financial viability following Carnegie Clean Energy's reported financial write-downs and potential changes to federal R&D tax incentives. The government's response indicates ongoing engagement and adjustments to mitigate risks.
AnsweredQoN 4024Legislative Assembly
Asked
13 September 2018
Member
Portfolio
Regional Development; Agriculture and Food; Minister Assisting the Minister for State Development, Jobs and Trade
QuestionView source ↗
I refer to the Albany Wave Farm project, and ask: (a) Has the project proponent (Carnegie Clean Energy) given the Government any indication it is not able to meet the agreed parameters of the financial assistance agreement established with Government; (b) Has the project proponent (Carnegie Clean Energy) indicated in any way to Government that its recently reported financial write-downs will in any way jeopardise the Albany Wave Farm Project; (c) As a business case was not produced for the project, what planning strategies did the Government engage in to ensure the financial security of the project; (d) Since the public announcement of financial write-downs by Carnegie Clean Energy, has the Government taken any steps to engage with Carnegie Clean Energy, to establish with confidence the company's capacity to deliver on the Albany Wave Farm Project; (e) Has the the project proponent (Carnegie Clean Energy) sought to change the parameters of the project as established in the financial assistance agreement; and (f) Has the project proponent indicated in any way an intention to reduce its own cash and/or equity investment in the Wave farm project?
AnswerView source ↗
Answered
16 October 2018
Responded by
Minister representing the Minister for Regional Development; Agriculture and Food; Minister Assisting the Minister for State Development, Jobs and Trade
Response time
7 days
a) No. Carnegie Clean Energy (Carnegie) has raised concerns regarding the availability of the Federal Research and Development Tax Incentive (R&DTI), which is proposed for reform. Carnegie has stated that an adjustment to the R&DTI would require alternative financing arrangements to be put in place.
b) No. The only concerns Carnegie has raised have been in relation to the proposed reforms to the R&DTI as described in (a).
c) The milestone arrangements in the Financial Assistance Agreement (FAA) were structured to require Carnegie to achieve specific outcomes before any State Government funding was released. In addition, the FAA requires that leveraged funding from the Australian Renewable Energy Agency (ARENA) must be obtained before Carnegie is entitled to any payment under the FAA. DPIRD engaged with ARENA throughout the State’s funding process to align milestones where possible and ARENA confirmed that the funding has been assigned to the project.
d) Yes. The Deputy Director General, Industry and Economic Development of DPIRD called a meeting with the Managing Director of Carnegie to discuss the company’s financial status following the release of Carnegie’s financial statements. This meeting was held on 19 September 2018 and, subsequently, DPIRD requested that Carnegie provide an explanation of the financing arrangements in place to fund its contribution of the total project funding. Carnegie has confirmed it has the capacity and commitment to deliver the Albany Wave Energy Technology Development Project.
e) DPIRD has negotiated a contract variation with Carnegie on the basis of the uncertainty of the Federal Government's proposed changes to the research and development tax incentives.
f) No.
b) No. The only concerns Carnegie has raised have been in relation to the proposed reforms to the R&DTI as described in (a).
c) The milestone arrangements in the Financial Assistance Agreement (FAA) were structured to require Carnegie to achieve specific outcomes before any State Government funding was released. In addition, the FAA requires that leveraged funding from the Australian Renewable Energy Agency (ARENA) must be obtained before Carnegie is entitled to any payment under the FAA. DPIRD engaged with ARENA throughout the State’s funding process to align milestones where possible and ARENA confirmed that the funding has been assigned to the project.
d) Yes. The Deputy Director General, Industry and Economic Development of DPIRD called a meeting with the Managing Director of Carnegie to discuss the company’s financial status following the release of Carnegie’s financial statements. This meeting was held on 19 September 2018 and, subsequently, DPIRD requested that Carnegie provide an explanation of the financing arrangements in place to fund its contribution of the total project funding. Carnegie has confirmed it has the capacity and commitment to deliver the Albany Wave Energy Technology Development Project.
e) DPIRD has negotiated a contract variation with Carnegie on the basis of the uncertainty of the Federal Government's proposed changes to the research and development tax incentives.
f) No.
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