APA Group's (ASX:APA) deal with CS Energy to develop and own the proposed Brigalow Peaking Power Plant in Queensland is expected to add about AU$90 million to group earnings before interest, taxes, depreciation, and amortization from fiscal year 2029, according to a Tuesday note by Jarden Research.

Development of the project remains conditional, and if met, the company will acquire an 80% stake, while CS Energy will operate and maintain the plant with a 20% stake, Jarden said.

The company has a balance sheet capacity to provide the assumed AU$800 million for the project; however, the cost for the 400-megawatt plant is higher than expected, Jarden added.

Jarden believes the company now faces negotiated revenue agreements and construction risks.

It maintained the company's overweight rating but raised its price target to AU$9.65 from AU$9.10.