Agreement on end to Roaring 40s joint venture

Hydro Tasmania and the CLP Group today announced an agreement to bring to a close the six-year old Roaring 40s wind farm development joint venture.

Under the agreement, it is proposed that Roaring 40s’ assets will be divided to allow both businesses to pursue their wind development objectives separately and more optimally.

Hydro Tasmania will take ownership of the operating wind farms at Studland Bay and Bluff Point (previously known as Woolnorth) in Tasmania’s north west together with a share of the development opportunities, including Musselroe in Tasmania’s north east.

CLP subsidiary TRUenergy will take over the South Australian operating wind farm at Waterloo and assume the Roaring 40s’ share in the Cathedral Rocks wind farm, as well as a share of mainland development opportunities.

The agreement to bring the joint venture to a close follows a strategic review and extensive discussions between the joint venture partners over recent months.

The decision has been approved by the Tasmanian shareholder Ministers while the boards of both businesses have agreed on the provisional terms to conclude the joint venture. Formal execution of the deal is targeted for the end of June 2011 when the assets will be transferred. During this period appropriate regulatory approval from the ACCC and the Foreign Investment Review Board will be secured.

Roaring 40s’ staff were today briefed on the arrangements to bring the joint venture to a close together with a timeline for effecting the appropriate transfer of staff. While a number of staff will be offered positions, there will be some redundancies and these will be managed fairly and sensitively.

The joint venture was established in 2005 to pursue renewable energy developments in Australia and overseas, particularly in China. Hydro Tasmania sold its share of Roaring 40s’ Chinese and Indian portfolio to CLP in April 2009 to concentrate on Australian development opportunities.

Hydro Tasmania CEO Roy Adair acknowledged the hard work of Roaring 40s’ staff in progressing the development of wind farms in Tasmania and mainland Australia. However circumstances had changed as a result of the joint venture partners becoming competitors in the National Electricity Market (NEM), particularly following Hydro Tasmania’s development of its retail business Momentum.

‘Roaring 40s, with the support of its shareholders, has become one of the leading wind farm developers in Australia,’ Mr Adair said. ‘However, the strategic goals of the joint venture partners have changed as well as the model for managing capital investment and operating costs. Therefore the time is right for us both to go our separate ways.

Mr Adair said Hydro Tasmania remains committed to wind development.

‘Musselroe is the main focus of our immediate wind development plans and we remain confident of commencing construction this year,’ he said.

TRUenergy’s Managing Director, Richard McIndoe, said: ‘Thanks to the work of everyone involved, the Roaring 40s joint venture has been a very effective vehicle in successfully developing wind farms in Australia and overseas.

‘For TRUenergy, renewable energy will be an important pillar for growth and we intend to expand on our strong internal renewable development capabilities to meet the needs of our growing national retail business.

‘The Roaring 40s assets we will acquire together with the skills and expertise from the joint venture, provide an excellent platform to support that expansion,’ Mr McIndoe said.

For futher information please contact
Helen Brain on 03 6230 5746 (Hydro Tasmania)
Con Hristodoulidis on 03 8628 1263 (TRUenergy)