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JV Partners Offer Valley Power For Sale

JV Partners Offer Valley Power For Sale

Contact Energy Limited and its joint venture partner, International Power Australia and Mitsui & Co. Limited (IPM) are to offer the Valley Power peaking station for sale, Contact Energy’s chief executive, Steve Barrett, announced today.

“Our partners in the project, International Power Australia and Mitsui & Co. (IPM), intend to divest their 60 per cent interest in Valley Power.

“This creates the opportunity for Contact to maximise value from the sale of its 40 per cent holding in Valley Power,” said Mr Barrett. Contact’s interest in Valley Power dates back to October 2001, when it announced the acquisition of a 40 per cent share of the station as part of the company’s long term strategic intention at that time to grow its Australian business.

“Since then, Contact has refocused on its opportunities in the New Zealand market and, consistent with the sale last year of our start-up Victorian retailer Red Energy, we are taking this opportunity to test market interest in our Valley Power investment,” Mr Barrett said.

Contact announced at the time of the Red Energy sale that the commercial logic for pursuing an integrated energy business in Australia had changed fundamentally for a variety of reasons. These included the recent change in majority shareholder and the emergence of new opportunities in New Zealand.

Valley Power is a 300 megawatt fast-start power station located in the Latrobe Valley, which services peak demand in the state of Victoria. The station comprises six 50 megawatt Open Cycle Gas Turbines, running primarily on natural gas.

The plant’s revenue is underpinned by a long-term cap contract and is currently project financed.

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