Australian electricity company Genex Power has reached financial close for its Kidston Stage II pumped hydro energy storage (PHES) project, marking the start of its construction phase.

Located at the former Kidston Gold Mine at the Kidston Clean Energy Hub in North Queensland, the PHES project will be built with an A$777m ($601m) investment, which also includes transmission infrastructure costs.

The project, said to be Australia’s first pumped hydro plant for almost 40 years, will support the integration of variable renewable energy generation from solar and wind.

Once completed, it will have the capacity to generate almost 250MW/2,000MWh of baseload power, equivalent to eight hours of energy storage.

Genex CEO James Harding said: “Financial close for the Kidston Pumped Storage Hydro Project is a monumental achievement and one Genex has been working towards for more than five years.

“Site preparation activities are now well progressed as we prepare for full-scale construction activities over the next few months.

“I would sincerely like to thank the Queensland government for the significant funding support and continued commitment to the Kidston project.”

Queensland’s state government has agreed to invest A$147m ($113m) to connect the PHES project to households and businesses in the state.

The investment will cover the construction of a 187km transmission line linking the Kidston renewable energy hub to the National Electricity Market (NEM).

In the future, the transmission line could also be used to facilitate the connection of further renewable generation projects in the region.

The project will also receive an A$610m ($472m) concessional debt finance from the Northern Australia Infrastructure Facility.

EnergyAustralia will be the project offtake partner for up to 30 years, while the engineering, procurement and construction activities will be handled by a joint venture company of John Holland and McDonnell Dowell.

The PHES project is expected to create 500 jobs in its construction phase and 20 ongoing operation roles upon completion.

Construction works at the site are expected to be completed by 2024.