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Babcock & Brown agree joint venture
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NZ Windfarms has signed a joint venture agreement with Australia’s Babcock and Brown and National Power for an $A70.14 million windfarm at Te Rere Hau in the Manawatu..
The deal is still subject to several conditions which must be satisfied within 30 days.
These include transfer of contracts and property related to the project held by NZ Windfarms to the joint venture, and completing a management contract for NZ Windfarms to provide management services.
Under the joint venture, NZ Windfarms retains a 50 per cent interest with NP Power and Babcock & Brown Windpower sharing the other half.
Te Rere Hau plans to build a 97 turbine wind farm in stages on 243 hectares, which will continue to be farmed for mixed cattle and sheep grazing.
The first five turbines are operating after being opened by Prime Minister Helen Clark this month. Another 14 turbines are scheduled for completion in the fourth quarter of next year.
Each turbine produces half a megawatt of power annually. When completed, the farm should produce 48.4MW – enough to power 18,000 homes.
The site is on the western slopes of the northern end of the Tararua Ranges, facing the prevailing wind and neighbouring two existing highly productive wind farms.
The two Australian companies signed a memorandum of understanding with NZ Windfarms last year.
The partners expect to realise carbon credits awarded to the project in 2004.
NZ Windfarms, a spin-off of listed turbine manufacturer Windflow Technology, listed on the NZAX alternative exchange in December last year.
Windflow Technology this month reported an annual loss of $NZ2.2 million after tax. Windflow has had problems with strong gusts of winds on its turbines under test conditions. The gearing on one prototype blew up in strong winds.
It said publicity about ongoing gearbox problems that a leading Danish wind turbine manufacturer was having gave the company “a sense of vindication” that its own designs would prove themselves.
Windflow said this month its production was still very cash-constrained and it warned increasing demand for wind turbines could make it difficult to source components on the world market.
NZ Windflow options must be exercised by Friday. To date, 80 per cent of the 3.97 million $1.10 options have been exercised, raising $3.5 million. NZ Windfarms shares last traded at $1.18.
© 2006 AAP
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