Following legal advice, the Western Australian government has agreed to pay Carnegie Clean Energy the previously negotiated revised first milestone payment of $2.625 million for the Albany wave energy technology development project.
According to reports, the state government is satisfied that Carnegie has commenced site development activities and design works, and has complied with its contractual obligations.
However, it is clear that the Federal Government’s proposed changes to research and development tax incentives have affected the company’s finances and consequently, the WA government will require the company to provide a comprehensive and detailed funding plan for their contribution to the project. The company will be given nine weeks to complete this plan.
The government will then assess whether the company has the financial capability, in an altered Federal R&D tax incentive environment, to complete the project.
WA regional development Minister Alannah MacTiernan said: “The Federal Government’s proposal to change R&D tax incentives, contained in their 2018-19 Budget, has threatened the bottom line of several Western Australian companies – from renewable energy to tech metals.
“These changes emerged after the State Government signed the funding agreement for the Albany wave energy technology development project. Given the circumstances surrounding the Federal R&D changes, the State Government is committed to protecting its investment and building safeguards in the project to minimise financial exposure,” said MacTiernan.
“We are committed to renewable energy research and development in the Great Southern, to drive jobs and economic benefits for the region. This project has the potential to advance wave energy technology that otherwise would have been developed overseas.”
“The State Government will closely analyse the funding plan for Carnegie’s contribution to the project to ensure the company has the capability to deliver the project.”