Key Findings
Snowy Hydro saw a long-term debt-to-equity increase of 125 percent as of June 2020.
The increased debt load borne by the company also appeared to be borderline unmanageable.
Executive Summary
Snowy Hydro, the Australian federal government owned hydro-electric power scheme, has announced bold ambitions to expand its fossil gas-fired power generation facilities. The announcement of these grandiose plans came following the company’s hubris in announcing it had delivered a ‘strong financial performance’ in the 2019-2020 fiscal year.
A closer look at the financial statements however reveal a starker picture, with the company producing its worst ever financial performance.
Taxpayers are likely to bear the costs of this financially unfeasible project.
Promoted as a project to help Australia transition to a low carbon future at the lowest possible cost, initial estimates suggested that the Snowy 2.0 pumped hydro scheme would cost A$2 billion.
Today, with construction, financing and transmission costs for the flagship project spiralling and expected to reach A$10 billion, it is unlikely Snowy 2.0 will ever pay a commercial return. Rather, taxpayers are likely to bear the costs of this financially unfeasible project, as well as the environmental burden.
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