Macquarie European Infrastructure fund acquires electricity assets

15 March 2005

The Macquarie European Infrastructure Fund (MEIF) today announced the acquisition of 100% of the equity of Energy Power Resources Limited (“EPRL”) from Electra Partners Europe Limited and others.

MEIF is a wholesale vehicle targeting investments in infrastructure and related assets in European OECD countries. Launched in April 2004 and managed by a member of the Macquarie Bank Group, the Fund this week reached €810million in investor commitments and is on track for €1billion before its final close later this year.

The acquisition of EPRL for net £80.825million (€116million), following a significant corporate and capital restructure, is the Fund’s first electricity investment.  With an enterprise value of approximately £184million (€264million) including cash balances,  EPRL owns and manages the UK’s largest portfolio of biomass fuelled renewable energy assets and has total capacity of 122 MegaWatts.  Almost 100% of EPRL’s power generation will be sold under long term power purchase agreements.

According to Mr Jim Craig, Head of Macquarie Europe and Managing Director of MEIF, the EPRL operations are a first class asset for MEIF with quality investment characteristics.

“Development of and investment in UK and European renewable energy assets is a very attractive opportunity,” says Mr Craig. “We are very pleased to have secured the EPRL portfolio for MEIF.  It offers an attractive risk/return profile, a secure revenue stream with predictable cash flow supported by long-term power purchase agreements and legislated Government support.”

The UK Government has established mandated targets for electricity generated from renewable sources in line with the 2001 European Union Renewables Directive, which set out indicative targets for all EU members.

“To meet the UK requirements – which are set to increase progressively from 3 per cent to 15.4 per cent of all electricity supplied by 2015 – a substantial increase in demand will be placed on the renewable energy sector,“ says Mr Craig.  “With a current output of around 800GWh, and the potential for further development, EPRL is well placed to continue to help meet the Government’s objectives for renewable electricity supply.”

EPRL is the fifth investment in MEIF’s growing portfolio - reflecting strong deal flow.  Its seed investments were a 50.1% interest in UK utility South East Water and 100% of Arlanda Express, the high speed rail service linking Sweden’s Arlanda Airport to the Stockholm city centre.  During 2004 MEIF was part of the consortium which acquired 70% of Brussels International Airport.  It will also be a cornerstone investor in the Wales & West gas distribution network in an acquisition expected to be completed in the second quarter of 2005.

The fund continues to search for quality infrastructure assets and expects to make further investments over the next 12 months.

For further information please contact:

Karen Smith
Corporate Communications Manager
Macquarie Bank
Tel: (44) (0) 20 7065 2420

NOTES TO EDITORS

The Macquarie Bank Group

Members of the Macquarie Bank Group manage more than €14bn in infrastructure equity around the world through a range of listed and unlisted vehicles. Infrastructure investments managed by Macquarie include assets in transportation, water, telecommunications and energy sectors in the UK, Germany, Portugal, Italy, Sweden, Canada, US, Australia, Korea, Japan and South Africa.   Macquarie has built a strong track record in adding value to the businesses it owns and operates and brings the benefits of global resources, relationships and expertise to its infrastructure businesses and the communities they serve.

The Macquarie Bank Group is a diversified international provider of specialist financial and investment banking services with over 6,000 people in 23 countries.  Macquarie’s European base is London where it has over 300 people, with additional offices in Dublin, Frankfurt, Geneva, Munich, Paris and Vienna.