QPM’s $113.7M Lease Deal Advances Isaac Power Station but Financing Questions Remain

QPM Secures Critical Financing for Isaac Power Station

QPM Energy Limited has reached a significant financing milestone by executing a $113.7 million Master Lease Agreement with Macquarie Bank. This bespoke facility is designed to cover the acquisition and transportation of two LM6000 gas turbines from GE Vernova, which are central to the 112MW Isaac Power Station (IPS) project in Moranbah, Queensland.

The lease agreement, with a term of up to 84 months, not only funds the turbines but also supports the construction phase and the first five years of operation. This arrangement locks in the delivery of the generation units, underpinning QPM’s target to commission the power station by mid-2027.

Advancing Toward Final Investment Decision

QPM is actively progressing toward the final investment decision (FID), with several critical workstreams underway. These include detailed engineering and design to validate capital costs, tendering and awarding major contracts such as turbine installation and transmission line construction, and securing necessary approvals from local and state authorities.

Additionally, QPM has executed a Preliminary Works Agreement with Powerlink Queensland to expedite grid connection at the Moranbah Substation, a vital step for integrating the IPS into the energy network.

Competitive Financing Terms and Future Refinancing

The lease facility is priced competitively, with interest rates below those assumed in QPM’s feasibility study, enhancing the project’s financial outlook. The structure includes an interest-only period during construction, followed by principal and interest repayments, culminating in a bullet payment at maturity.

QPM anticipates refinancing this lease with a larger project finance facility after FID, subject to Macquarie’s approval. The company is also working with RBC Capital Markets and engaging strategic investors to complete the broader financing package for the IPS development.

CEO Perspective and Market Implications

CEO David Wrench highlighted the importance of securing the lease agreement, stating it positions QPM well to deliver Queensland’s next major gas-fired power station on time and on budget. He emphasized that the lower cost of finance strengthens the project’s capacity to generate robust returns for shareholders.

With this milestone achieved, the Isaac Power Station project moves closer to becoming a key player in Queensland’s energy landscape, promising to be the state’s lowest-cost gas-fired generator upon completion.