Aboriginal groups go ‘from stakeholders to shareholders’ in green hydrogen scheme

A proposed green hydrogen project in remote Western Australia represents a “different way” of developing infrastructure projects with the consent and involvement of indigenous people, its shareholders say.

The East Kimberley Clean Energy Project is being developed by the Aboriginal Clean Energy Partnership, an organisation that is equally owned by the traditional owners of the land, MG Corporation and Balanggara Aboriginal Corporation, as well as the Kimberley Land Council and climate change investment firm Pollination.

The four partners are equal shareholders in ACEP, which is overseeing the development of the project, billed as Australia’s first hydrogen and ammonia production hub that will be 100 percent powered by renewable energy.

The team has completed project scoping, and stage one involves building a 900MW solar farm, which would be the largest in Australia, and a 50,000-tonne-per-year hydrogen production facility on MG Corporation freehold land near Kununurra, WA. Solar power will power electrolysers to produce green hydrogen here that will be transported to the existing Port of Wyndham via a new 120km pipeline.

In addition, Ord Hydro, an existing hydro scheme initially built to power the now-closed Argyle diamond mine as well as the local towns of Wyndham and Kununurra, will provide baseload power to an ammonia production facility in Wyndham. That facility will produce around 250,000 tonnes of green ammonia each year, to both be used locally and exported through the port.

Pollination head of projects Rob Grant told Infrastructure Investor the project will require capital expenditure of around A$3 billion ($2 billion; €1.8 billion).

“We’re entering a feasibility phase now, having done a scoping study over the last eight months, to take the project through an integrated environmental, engineering, heritage, native title, approvals development process. Then we will come to market later this year or early next year with an investable product that has all the indigenous land use agreements in place, marketing it to large-scale institutional and strategic investors,” he said.

Following a targeted final investment decision around October 2025, the scheme aims to be operational from the beginning of 2029.

A different approach

Also speaking to Infrastructure Investor, Kimberley Land Council CEO Tyronne Garstone said that while Pollination provided the technical expertise, the involvement of KLC and the two landholding entities would help to de-risk the project from an early stage thanks to the ability of Aboriginal groups to influence the process and help ensure appropriate approvals are in place prior to any potential equity partners coming on board.

“It also mitigates the risk for First Nations, ensuring that infrastructure is built in appropriate areas, and there is no potential damage to cultural heritage, no environmental concerns and making sure employment and procurement outcomes are built into the planning of the project,” he said. “There’s a notion that First Nations people are impediments to development but we just haven’t been afforded the time to try and have equity in projects or negotiate equal terms, and [influence] how we want to see things rolled out on our country.”

Garstone said that creating an equal partnership between an infrastructure developer and First Nations groups in this way is “elevating free, prior and informed consent to the highest standard”.

“It says to a developer: ‘If you want to come and do something on our country, you need to come and work with us.’ It’s about trying to shift us from being a stakeholder to a shareholder, trying to get equity in the company to get as much value across the supply chain of the project as possible, which is a critical part [of this],” he said.

“And noting the lack of capital… that First Nations have to try and get [to get] this [type of] project off the ground, it’s going to need some innovative thinking from governments. The reality is we need to decarbonise Australia and we need renewable energy [to do that]. If they really want to try and meet the timelines they’re ambitiously reaching for, there has to a strategy in trying to work with First Nations groups – and this project is showing how it can be done.”

Grant echoed this and said that it was Pollination’s role to help develop the scheme before connecting investors with the partnership, once the project is sufficiently de-risked.

“This is quite different to what you see in the resources sector, where a lot of this engagement is left quite late, it’s drawn out and it’s distributed. It isn’t a royalties discussion – in this case, we have land use agreements or lease agreement with freehold landholders who are also shareholders, and then we all share in [the distributions of the project we create].

“Obviously by the time we go through the capital investment stage we will be diluted, but we want to stay as big investors as we possible can in our own project as it progresses.”

Initial funding for the scheme will be provided by grants from several organisations as well as from Pollination’s own balance sheet.

Garstone said the East Kimberley Clean Energy Project is “unique” but that the principle of sharing equity with First Nations groups to create a true partnership with them can be replicated elsewhere.

“The critical thing for us is seeing First Nations people and affording them the capital resources to do the initial upfront work like environmental [and] heritage consultations and infrastructure build, because it would be nice for First Nations groups to be taking projects to the marketplace instead of waiting for providers to knock on our door and tell us what the project is.”

Editor’s note: This article was amended on 26/7/2023 to remove a reference to grant funding from the Australian Renewable Energy Agency, which the project has not been awarded to date.

ABOUT THE PARTNERS

Balanggarra Ventures Corporation is a subsidiary of Balanggarra Aboriginal Corporation, a registered native title body corporate that receives and manages entitlements of the Balanggarra People, who are the native title holders of their country in and around Wyndham, WA.

MG Corporation, also known as the Yawoorroong Miriuwung Gajerrong Yirrgeb Noong Dawang Aboriginal Corporation, receives and managed the entitlements and benefits of the Miriuwung and Gajerrong Peoples, who are the native title holders of their country in the north-east part of the East Kimberley region.

Kimberley Land Council was formed in 1978 by Kimberley Aboriginal people as a political land rights organisation, and has grown to become the peak indigenous body in the Kimberley region working with Aboriginal people to secure native title, conduct conservation and land management activities, and develop cultural business enterprises.

Pollination is a specialist climate change investment, project development and advisory firm headquartered in Sydney.