Eastland Generation seeking a growth partner to help fund a strong pipeline of renewable generation opportunities.
Alongside its existing key suppliers, Ormat Technologies and Ngati Tuwharetoa Geothermal Assets (NTGA), work is underway to build TOPP2, a 49MW geothermal power station in Kawerau.
Substantial and well-progressed development pipeline.
Eastland Generation has announced a strategic capital raise to help fund the expansion of its renewable generation portfolio.
The company intends to raise funds by offering a 50 percent ownership stake, inviting potential investors to explore the rare opportunity.
Matt Todd, Chief Executive of parent company Eastland Group said bringing a partner on board would expedite their advanced pipeline of growth.
“There is nowhere else in New Zealand where you can invest in a renewable energy business that has existing assets already generating strong cash flows, a fully formed operational and development capability, and a solid growth path. It’s a very unique opportunity.”
Existing assets and development pipeline
Eastland Generation owns and operates three geothermal power plants on the Kawerau geothermal field in the Bay of Plenty region. This includes Te Ahi o Maui (26MW), Geothermal Developments Ltd (9MW) and TOPP1 (24MW).
This is in addition to a hydropower station (5MW) near Wairoa and a soon-to-be operational utility scale solar farm (5MW) based on land adjacent to Gisborne Airport.
Eastland Generation also has a significant pipeline of renewable energy projects. In the near-term, one of its key projects is the partnership with Ormat Technologies to build the 49MW geothermal power station, TOPP2.
TOPP2 top of the list
“A key driver of the capital raise is to use the funds, in part, for the development of TOPP2, a 49MW geothermal power station in Kawerau. This plant is twice the size of TOPP1 and Te Ahi o Maui,” Mr Todd said.
“Similar to the TOPP1 agreement, we will purchase geothermal fuel from NTGA over the life of the
power station.
“We have signed an agreement with Ormat Technologies, a leading global provider of renewable energy solutions to build and operate the power plant, with an option for Eastland Generation to purchase it.
“The development of TOPP2 has been in the pipeline since signing the agreement for TOPP1 in 2021. Over the last two years, we’ve been working with our key suppliers to progress the development, undertake site investigations, preliminary design work and lodge resource consent applications.
“We’re excited about the project and operational synergies it will bring across our three existing geothermal plants.
“TOPP2 is the most advanced of our projects and will add significant scale to our portfolio, reinforcing our position as a significant developer, owner and operator of renewable energy in the New Zealand market.
“Additionally, there are numerous other projects at various stages of development building long term regional energy capacity and resilience, which will be announced in the near future.
“It will also enable us to exceed our goal of 100MW of renewable generation by 2027, while also significantly contributing to the government’s target of 100 percent renewable electricity by 2035.
Leading the charge, together
“Now is the right time to look for a growth partner as we foresee electricity demand to grow substantially, particularly as the country moves towards the electrification of transport and process heat,” said Mr Todd.
“With the support and strategic expertise of a new partner, we’re confident in our ability to accelerate our pipeline of renewable energy projects, expand our operational capacity, and advance innovation in the industry.
“Both our team and Trust Tairawhiti want a partner that brings more than just capital, we want to form meaningful relationships and work alongside them to support our growth objectives and team over the long term.
Eastland Group’s sole shareholder Trust Tairawhiti will provide a short-term investment of $30m to support the initial development of TOPP2.
“This project takes advantage of the expertise in renewable energy developed within Eastland Generation, and builds on existing relationships with landowners and industry stakeholders,” said Trust Tairawhiti Chair John Clarke.
“Bringing another shareholder into the generation business will provide additional capital to allow Eastland Generation to grow, without the Trust being required to provide additional long term equity investment. This is good for the company, but it also allows the Trust to better diversify, balance its portfolio and focus on supporting the local community.
“The short-term investment of $30m will not prevent the Trust from making other community and economic investments in Tairawhiti. Ultimately, it will provide a solid return on investment and capital release back to the Trust so we can provide more for beneficiaries over the long-term.”
Forsyth Barr has been appointed as the advisor to run the capital raise process, which is expected to commence shortly.
Eastland Generation and Trust Tairawhiti will keep staff, stakeholders and the community updated through key stages of the process.
