Macquarie Bank and Novera establish renewable energy joint venture which acquires United Utilities Green Energy in the UK

20 December 2004

Macquarie Bank Limited (ASX:MBL) and Novera Energy Limited (ASX:NVE) announced today that they have established Novera Macquarie Renewable Energy Limited (NMRE), a 50:50 joint venture company whose purpose is to own and operate renewable energy assets, initially in the United Kingdom (UK).

Macquarie Bank has acquired its investment in NMRE with the intention that it will be a seed asset for a proposed renewables infrastructure fund, to be established during 2005.

NMRE will commence operations on 20 December 2004 with one of the largest diversified renewable energy portfolios in the UK, purchased from Novera Energy and United Utilities plc for a total enterprise value of £120.5 million ($A301.3 million)[1].  Macquarie Bank has provided an equity investment of £16.3 million ($A40.8 million) towards these asset acquisitions, with Novera contributing an equal amount of equity, with the balance being debt.

NMRE’s initial portfolio will have total capacity of approximately 128MegaWatt (MW).   All of NMRE’s electricity output will be sold under long term contracts.  NMRE will have approximately 60 employees to manage and operate the sites. 

Of the 128MW, 107MW is currently operational, consisting of 79MW of LFG (Land Fill Gas generation) at 40 sites across the UK, 16.2MW of small scale hydro generators at 10 sites and 12MW of primarily coal bed methane at one site.   NMRE expects the additional 21MW of generating capacity to be added to the portfolio from the completion of the 14.5MW Mynydd Clogau wind farm and an expansion of 7MW on existing and new LFG sites. 

Mr Ian Kay, Division Director from Macquarie Bank and one of the founding Directors of NMRE said, “The UK is generally seen as one of the most attractive markets in the world for the development of and investment in renewable energy.  The UK Government has established mandated targets for electricity generated from renewable sources in line with the 2001 European Union Renewables Directive.

“With the UK requirements set to increase progressively from an initial 3 per cent to 15.4 per cent of all electricity supplied by 2015, it is clear that substantial investment in the UK renewable energy sector will be required.

“Macquarie is ideally placed to play a key role in the emerging renewable energy sector in the UK and globally.  Macquarie will use its financial expertise and strong track record in infrastructure investment and asset management to enhance the value of NMRE and to acquire further attractive renewable energy assets in the future,” Mr Kay said.

NMRE’s acquisition of Novera Energy Europe Limited (NEEL) from Novera Energy for net £25.3 million ($A63.3 million), included all of Novera’s LFG operations in the UK including sites under development as well as the planned Mynydd Clogau wind farm in Wales, for which construction is about to commence.

NMRE has also acquired United Utilities Green Energy (UUGE), a wholly owned subsidiary of United Utilities plc for £63 million ($A157.5 million).   This acquisition included all of UUGE’s LFG operations and sites under development and a small scale hydro power business. It does not include UUGE’s wind farm development portfolio.

Barclay’s Bank has provided £92.5 million ($A231.3 million) in debt facilities to NMRE, including acquisition facilities for the purchase of NEEL and UUGE shares, and a facility to finance the construction of the Mynydd Clogau windfarm and £5 million in an undrawn working capital facility.

The founding Directors of NMRE are Shane Gannon and David Scaysbrook from Novera, Martin Stanley and Ian Kay from Macquarie Bank, and Audette Exel, an independent director and Chairman of NRME.

Macquarie Bank notes there is marginal Tier 1 capital impact as a result of its equity investment in NMRE.

See map of assets attached below.

Additional information:

Karen Smith
Corporate Communications - UK
Tel: (44) 20 7065 2420