Senate Environment and Communications Legislation Committee, , 7:31:45 to 7:34:48
Senator Roberts questions the timeline for debt repayment and the total interest costs associated with the project, while the CEO discusses shareholder loans and capitalized interest.
Topics: Government spending, Renewable energy
Speakers: Dennis Barnes, Malcolm Roberts
>> Thank you, Chair, and thank you, Mr. Barnes, and your staff for being here again. When will the money borrowed to pay for this project, including bonds, be paid off? What year?
>> So, we finance uh Snowy 2 at the company level, so Snowy Hydro level. uh our private debt and our shareholder loans, so loans from the government have a range of uh debt repayment profiles. I think for the uh shareholder loan, there's a a soon as reasonably practical obligation. Uh you've used the word bonds. We don't specifically use bonds, but I presume you're meaning uh bank debt and and shareholder debt.
>> Yes, I do. So, what year?
>> Well, it'll be paid off progressively.
So what year will it be paid off finish paying off?
>> Well, we will always hold a debt balance as uh Snowy Hydro. So we will never go to zero debt. Uh
>> when will you pay off 95%.
>> Well, we will never go to zero balance.
We will always hold 5% balance. So when will you go to 95% paid?
>> When I don't have a repayment profile in my head.
>> Could you take it on notice?
>> Uh I don't think we would be able to model that to be honest. Uh but we happy to take on notice and see what we can provide. We could probably provide the debt rolloff profile that we will be required to repay our refinance.
>> Whatever you think is needed for good stewardship of taxpayer money. >> It's not valid to say consolidated revenue has contributed to this cost of snowy 2 when your government is running debt finance deficits out past 2050. Every cent going into Snowy 2 is debt. How much is the total cost of the project including the interest paid on capital through to well the the year you
>> so the uh the $12 billion target cost that was approved in 2023 there was a $4 billion uh equity contribution
>> that was under the first year of the second year Albanesei government
>> well it was in 2024 I think it was approved uh >> however that is in the political cycle uh there was an additional uh shareholder loan provided which will be required to be paid back in the 2030s. Uh obviously we've provided this disappointing advice to government of the higher cost and they are considering how they may support us uh through that higher cost. Uh in terms of capitalized interest again we finance the organization at the uh company level rather than the project level. And I think in a prior hearing I referred to between two and3 billion of capitalized interest over the life of the project.
>> Could you total that up? Could you total that up on notice please?
>> Yeah, of course.
>> Give it to Thank you. >> So you've confirmed the current sunk cost is around $12 billion.
>> Yep. Uh as at the end of June, we were just under 12 billion.