By Gillian Tan
SYDNEY--China Longyuan Power Group (0916.HK) and Thailand's
Electricity Generating PCL (EGCO.TH) are among shortlisted parties
vying to buy a stake in an Australian wind farm, people familiar
with the matter said Monday.
Interest in the Boco Rock wind farm in New South Wales state
planned by Continental Wind Partners and Wind Prospect Group
underscores how overseas investors are becoming more confident that
they can make a profit from renewable energy projects. Early
investments had to compete for customers with generators of
electricity produced from burning cheaply available thermal coal,
but the government has moved to close the gap, including by
introducing measures such as a carbon tax.
At the end of the 2009-2010 financial year, the last complete
data available from the Australian government, renewable energy
accounted for around 8% of total electricity generation in the
country. Of this, wind energy contributed 2% to total power
output.
However, this is set to increase sharply as Australia's
government has set a target of having 20% of electricity supply
coming from renewable energy sources like wind power by 2020. To
achieve this goal, it has introduced policies that mandate
electricity retailers to buy a proportion of their sales from
renewable energy sources.
The Wall Street Journal reported in October that Continental
Wind Partners was seeking to sell a stake in Boco Rock, which will
have up to 107 megawatts of installed generating capacity.
Bidders may acquire between 50% and 100% of Boco Rock, depending
on whether General Electric Co.'s (GE) energy investment arm GE
Energy Financial Services exercises its right to 50% of the wind
farm's equity, the people said.
The entire project would have an enterprise value of around 300
million Australian dollars (US$311 million), and shortlisted
parties are speaking to banks about possible financing packages,
two of the people said.
Final bids are due by the end of April, and a deal could close
the following month, the people said.
The first stage of development includes 66 turbines, and
government approval has been received to double the wind farm's
size to up to 122 turbines. In September, EnergyAustralia signed a
power purchase agreement, or PPA, which includes acquiring the
output and renewable energy certificates generated from Boco Rock's
foundation stage. EnergyAustralia is the Australian unit of Hong
Kong-listed power generator CLP Holdings Ltd. (0002.HK).
The people said Bangkok-listed Egco has previously sought to buy
Australian assets including the 53-MW Hallet 5 Wind Farm, which was
eventually sold by AGL Energy Ltd. (AGK.AU) to Japan's largest wind
power developer Eurus Energy Holdings Corp., a company owned by
Toyota Tsusho Corp. (8015.TO) and Tokyo Electric Power Co.
(9501.TO).
Egco also sought to buy a stake in two of Australia's biggest
wind farms from closely held renewable energy producer Hydro
Tasmania, a process that was eventually won by China's Guohua
Energy Investment Co., a unit of state-owned enterprise Shenhua
Group.
Continental Wind Partners declined to comment on the shortlist,
but said it was in the process of financing the Boco Rock wind
farm. Spokespeople for Egco and China Longyuan Power didn't
immediately return requests for comment by phone and email.
-Write to Gillian Tan at gillian.tan@wsj.com
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