By Vesh Arumugam
The State Government has terminated its Financial Assistance Agreement with Carnegie Clean Energy to deliver the Albany wave energy technology development project, following an assessment of the company’s financial capability to deliver the project.
It is said that an unexpected proposal to change Federal Government’s Research and Development tax incentive scheme contributed to destabilisation of the company’s financial position causing the financial agreement to be pulled back.
Regional Development Minister Alannah MacTiernan the Government is committed to diversifying regional economies, and this project was just one in a suite of initiatives to drive new job opportunities in the regions.
“Research and development projects always carry risk, and our Government won’t apologise for supporting local renewable energy R&D,” he said.
In October 2018, the State Government exercised its power under the agreement to require Carnegie to provide a comprehensive and detailed funding plan for their $25.6 million contribution to the project.
That followed concerns about the company’s finances, driven by uncertainty surrounding the future of Federal R&D tax concessions, losses from other operations and asset write-downs.
Minister MacTiernan said that it is unexpected to see the company’s unprecedented change in its financial stability and all it happened in a very short time.
“Carnegie’s finances were in good order when the contract was signed and there was no way to predict the changing circumstances over the last 12 months,” she said.
The $13.125 million in the Budget for this project will be directed towards delivering radiotherapy services in Albany.
The State Government’s co-investment in The University of Western Australia’s Wave Energy Research Centre will continue, focusing on marine renewable energy and supporting Albany’s marine industries.
Works completed by Carnegie with State Government funding, including geophysical and other surveys and mathematical models on wave conditions in Albany, will be made available to UWA and other interested parties.