Power Engineering - Novera and Macquarie Bank establish renewable energy JV

20 December 2004 - Australian companies Novera Energy and Macquarie Bank announced today that they have established Novera Macquarie Renewable Energy Limited (NMRE), a 50:50 joint venture company whose purpose is to acquire and operate renewable energy assets, initially in the United Kingdom.

NMRE commences operation today as one of the largest diversified renewable energy portfolios in the UK, purchased from Novera Energy Limited and United Utilities plc, with an approximate enterprise value of £120.5m ($234m).

Novera and Macquarie have provided an equity investment of £16.3m each for their share of NMRE.

Novera Chairman Dr Don Stammer said these transactions delivered an outstanding outcome for Novera shareholders with good long term growth prospects for the company, and confirmed Novera as one of the leading developers and managers of renewable energy assets in Europe.

"As joint owner with Macquarie Bank of a $A300m renewable energy portfolio, Novera's core business will now centre on sustainable energy asset investment and development," Dr Stammer said.

NMRE has acquired United Utilities Green Energy (UUGE), a wholly owned subsidiary of United Utilities plc, for £63m. UUGE had a large diversified renewable energy portfolio that included landfill gas (LFG) and hydro sites. The purchase does not include UUGE's wind farm development portfolio.

NMRE has also acquired Novera Energy Europe Limited (NEEL) from Novera for a net £25.3m after transaction costs. NMRE has acquired all of Novera's LFG
operations in the UK including sites being developed, and the Mynydd Clogau wind farm in Wales which, subject to minor conditions precedent, is about to commence construction. Should these conditions precedent not be met, Novera may be required to re-purchase the project.

As a result of these acquisitions NMRE's initial portfolio will have an installed capacity of 107 MW. Of this 95 MW is currently operational, consisting of 79 MW of LFG at 40 sites across the UK and 16.2 MW of small scale hydro generators at 10 sites. NMRE will have approximately 60 employees to manage and operate the sites.

NMRE expects an additional 21MW of generating capacity to be added to the portfolio from the completion of the 14.5 MW Mynydd Clogau wind farm and an expansion of 7 MW on existing and secured LFG sites. All of NMRE's electricity output will be sold under long term contracts.NMRE will target double digit annual yields.

NMRE has a long term Power Purchase Agreement (PPA) with UK energy retailer Centrica. The PPA applies to all new and uncontracted renewable energy output from NMRE.

The contract builds on Centrica's strategy of sourcing green electricity from a balanced portfolio of own generation, contracts and traded market purchases. It expects to invest up to £750m in renewable assets in the coming years and has interests or ownership of seven wind farm projects, several of which are currently in development.

Jake Ulrich, Managing Director of Centrica Energy, said: "This is another important step forward in our renewables strategy and provides us with long term access to green electricity for our British Gas customers.

"We are pleased to be working with Novera and Macquarie Bank following their purchase of United Utilities' Green Energy business and this agreement allows our customers to benefit from the diverse range of renewable sources supplying this clean, green power."

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