Work to start on $425m Neerabup power station

Babcock & Brown Power says it expects to commence construction of a 330MW power station at Neerabup immediately, after completing financial arrangements for the $425 million project.

Located 50 kilometres north of Perth, Neerabup will comprise of 2 x 165MW Siemens open cycle gas turbine units and has been co-developed by Babcock & Brown Power and ERM Power.

The Neerabup plant is being constructed at a total cost of $425 million, including $65 million of pipeline costs, with major contractors being Bilfinger-Berger (civil works) and supply of power plant by Siemens.

BBP holds 50 per cent of the interest in the partnership which owns the project with ERM holding the remaining 50 per cent.

BBP's investment in the project will be fully funded by limited recourse debt with no equity required to be invested until commissioning.

Operating as a peaking plant, Neerabup has signed a 20 year off-take agreement with electricity retailer Synergy which provides a secure cashflow to the project.

Long-term contractual arrangements for supply of gas are in place to meet the projects off-take commitments such that the project has no material gas price exposure.