Sun Cable, the company developing one of the world’s biggest solar and battery projects, has abruptly entered voluntary administration, casting doubt on the future of the $35 billion proposal.
The company behind the Australia-Asia PowerLink (AAPowerLink) project announced the “difficult decision to enter voluntary administration” on Wednesday after what it said was “the absence of alignment with the objectives of all stakeholders”.
“Whilst funding proposals were provided, consensus on the future direction and funding structure of the company could not be achieved,” Sun Cable said in a vaguely worded statement on Wednesday afternoon.
A disagreement between Atlassian co-founder Mike Cannon-Brookes and mining billionaire Andrew Forrest over the company’s expenditure and failure to meet certain milestones is reportedly behind the decision.
It comes less than three months after Sun Cable announced that the project was oversubscribed by about 50 per cent, having received expressions of interest for ~2.5GW when it only planned to supply ~1.75GW.
The $35 billion AAPowerLink project plans to send solar power produced in the Northern Territory to Singapore using a 4,200km undersea transmission cable. It is expected to eventually provider up to 15 per cent of Singapore’s electricity needs from 12,000 hectares of solar arrays in the Top End.
FTI Consulting has been appointed to lead the voluntary administration process, with administrators Christopher Hill, David McGrath and John Park to “work with the company’s management team and key stakeholders to determine appropriate next steps for the business”.
Sun Cable expects this process will “involve a process to seek expressions of interest for either a recapitalisation or sale of the business”, unlocking a “path forward for the company to access additional capital for continued development of [AAPowerLink]”.
Sun Cable founder and chief executive David Griffin remains confident the project can be completed but it is not clear whether construction will still begin in 2024 as planned, or if AAPowerLink will reach full operation by 2029.
“Sun Cable has made extraordinary progress in developing the AAPowerLink. This project remains well paled for completion,” Mr Griffin said.
“As we have progressed our work, the demand for delivering reliable, dispatchable 24/7 renewable energy in the NT and the region has risen materially. Sun Cable looks forward to developing and operating the projects to meet this demand.”
Atlassian co-founder and Sun Cable chair Mike Cannon-Brookes is also “confident [Sun Cable] will play a huge role in delivering green energy for the world, right here from Australia”
“I fully back this ambition and the team, and look forward to supporting the company’s next chapter,” he said.
In its evaluation of the AAPowerLink business case last year, Infrastructure Australia said the project would drive down electricity costs to Darwin residents, while reducing greenhouse gas emissions and developing a new renewable energy export industry.
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