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Meridian Energy sells Southn Hydro for $A1.425bn

Media Release
For immediate release: Monday 31 October 2005

Meridian Energy sells Southern Hydro for $A1.425bn

State-owned power generator and retailer Meridian Energy has sold its Australian subsidiary Southern Hydro to leading Australian energy company AGL for $A1.425 billion.

Announcing the sale today Meridian Chief Executive Keith Turner says the sale reflects the growing value being placed on renewable electricity generation internationally, as well as the value Meridian has added to the Southern Hydro assets in the 2½ years it has owned them.

“In a world that is beginning to price carbon into the costs of producing energy, AGL has recognised the potential value of adding the Southern Hydro assets to its generation portfolio. They have also recognised the significant improvements to those assets that have resulted from the world-class hydro engineering expertise we have been able to contribute during our ownership.”

Dr Turner says the sale includes the 62 megawatts (MW) of hydro assets in New South Wales bought by Meridian for $A85 million in April 2001, the 540MW, $A600 million Southern Hydro assets purchased in May 2003, the 91MW Wattle Point wind farm it commissioned in May this year, as well as several wind farm and hydro developments currently in the advanced development planning stages.

While the sale itself marked a successful outcome for Meridian, the foray into the Australian market had brought other long-term benefits for both Meridian and New Zealand.

“By developing wind energy on both sides of the Tasman simultaneously, we were able to create economies of scale which made large-scale wind generation economically feasible in this country.

“We are now at a stage where we are developing wind on a sufficient scale in New Zealand alone that achieves similar economies.”

Dr Turner says the strong international interest shown in the Southern Hydro renewable assets is a powerful endorsement of Meridian’s strategy of focussing solely on renewable generation.

“We want to congratulate AGL for also seeing the high value of renewable energy in Australia’s largely fossil-fuelled electricity system,” he said.

ENDS

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