Prime Minister Scott Morrison said the project will inject the energy supply and reliability our electricity market needs, helping cut costs to families and businesses and cut Australia’s emissions.

"Snowy 2.0 is shovel-ready which is why it’s one of the first cabs off the rank in our next tranche of energy projects to underwrite power generation so we can make electricity more affordable and reliable," he said. 

The deal promises an expansion of the Snowy Mountains Scheme which aims to help make renewables reliable, reduce volatility and drive affordability in energy markets. 

A statement said the government was pleased to announce shareholder approval has been given for Snowy Hydro Limited (Snowy Hydro) to proceed with Snowy 2.0.

"Following Snowy Hydro Board’s final investment decision on December 12, 2018, the Government has reviewed the project’s business case and is satisfied that the project stacks up and will benefit energy consumers and the Snowy Mountains region," the statement read. 

"The Government will commit up to $1.38 billion in an equity investment for Snowy 2.0, with the remainder of the project to be financed by Snowy Hydro Limited."

The statement said Snowy 2.0 will increase generation capacity by 2,000 megawatts and provide 175 hours of energy storage - enough to power the equivalent of 500,000 homes during peak demand. 

"Snowy 2.0 will create up to 2400 jobs in construction and support up to 5000 direct and indirect jobs across the Snowy Mountains region," it further read. 

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