Forrest, Cannon-Brookes’ vision for Sun Cable at polar opposites as accusations fly
Mike Cannon-Brookes backs the ambitious plan to send power from Darwin to Singapore while Andrew Forrest reportedly wants Sun Cable as a domestic power supplier.
A further rift has opened up between the two billionaire backers of the $30bn Sun Cable project with Mike Cannon-Brookes pushing the original 4200km power concept exporting power to Singapore while Andrew Forrest wants to re-imagine the development as a domestic renewable energy scheme.
Sun Cable was placed into voluntary administration on Wednesday, derailing the giant solar and battery project after a spat between the Atlassian founder and Dr Forrest, whose Squadron Energy was the scheme’s other anchoring shareholder.
While the original explanation for the split between the two high-profile business moguls was cited as budget and execution issues, a more fundamental divide has now emerged. Mr Cannon-Brookes’ private investment arm Grok Ventures has accused Squadron of wanting to axe the export cable component in its entirety.
“There has been a difference of opinion between Squadron and all other shareholders over prioritising the Singapore project, even though it has always been the company’s marquee project,” a Grok spokesman said on Friday.
“This was the reason the founders started the company, and the reason investors invested in the company, in the first place. Once operating there would be energy generation coming out of Sun Cable to provide renewable energy to both Singapore and various projects in the Northern Territory.”
Sources said Squadron wanted to recast Sun Cable’s marquee project, the Australia-Asia PowerLink, and make it a domestic-focused renewable generator with an eye on using supplies from the vast solar farm to prop up a future green hydrogen plant, which Squadron or
Dr Forrest’s Fortescue Future Industries may look to develop in the Northern Territory.
The Sun Cable project aims to send power from Darwin to Singapore via a 4200km electricity cable. It plans to transmit 20 gigawatts of power from the world’s largest solar farm near Tennant Creek to Darwin via a 6.4GW, 800km overhead transmission line along with 36-42 gigawatt hours of battery storage.
The vast subsea cable would then move electricity from Darwin to Singapore, where it aims to provide 15 per cent of the Asian city-state’s needs.
Some 800MW of green electricity will be provided for northern Australia from the Sun Cable plant in a bid to boost industrial activity in the region.
Squadron is thought to have raised issues over the technical and construction challenges involved in the cable, in addition to the cost, with the $30bn-plus price tag making it one of the world’s most expensive clean energy facilities under development.
John Hartman, who runs Dr Forrest’s Tattarang private investment arm, hinted at the discord on Thursday after saying he had doubts about Sun Cable’s ability to deliver on the project’s vision “in its current form”.
Both billionaires are thought to have ruled out working together again on the project, with Mr Cannon-Brookes floating the idea of assembling a new investment consortium to reboot the project while continually pointing to a lack of support among fellow investors over Squadron’s proposal to effectively scrap the original premise of the project.
“Grok and every other investor is firmly of the view that the Australia-Asia PowerLink is the project to back – it continues to hit important milestones and remains on track to deliver affordable clean energy to Singapore. This lighthouse project will likely deliver significant outcomes for the company, attract further investor capital and create a new industry in Australia,” Grok said.
“Grok’s investment philosophy is to back founders to build real value for investors and to assist the world’s energy transition.”
Sun Cable still needs to raise more than $30bn in debt and equity by the end of the year to back its plans, with the company last year appointing Macquarie, Moelis & Co and MA Financial as its financial advisers for the task.
The Australia-Asia PowerLink project was touted as creating more than 1500 jobs during construction, 350 operational jobs and 12,000 indirect jobs. It had planned to start supplying energy to Darwin in 2026.
Documents filed with the Australian Securities and Investments Commission this week showed that Sun Cable received a $28m cash injection on December 24.
Both Squadron and Mr Cannon-Brookes’ private investment company CBC Co chipped in, along with MYOB founder Craig Winkler, Craig Scroggie – chief executive of data centre firm NextDC – and Eytan Lenko, chief executive of Boundless Earth.
The same group kicked in another $26m in mid-September, the documents show, with Squadron and CBC also paying $6.2m for new shares in late October.
All of the share issues are believed to be cash calls from the $210m capital raising announced by Sun Cable in March last year.
The project was assessed as “investment-ready” by Infrastructure Australia in June last year.
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