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Contact investigates windfarm

Monday 21st July 2008

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Contact Energy, whose Australian parent is the subject of a hostile takeover offer, is investigating the development of the $500 million Waitahora Wind Farm Project.

The wind farm near Dannevirke would have 177 megawatts of capacity and include 65 turbines. Contact, the biggest utility on the NZX 50 Index, has been developing the proposal for about a year and has an agreement with the landowner, chief executive David Baldwin said.

The announcement comes the same day that the Takeovers Panel asks for expressions of interest in being the independent expert to assess the value of Contact should BG Group Plc succeed in a takeover of Origin Energy, which owns 51.4% of the New Zealand utility. That transaction could give rise to an offer being made for the remaining shares in Contact, the panel said today.

Shares of Contact jumped 6.3% to $8.10 today and have climbed 9.5% from $7.14 on July 15.

The company has as much as $2.5 billion of investment in the pipeline for wind and geothermal projects. The proposal doesn't require any special notifications in terms of BG Group's A$13.8 billion approach to Origin because it is only at the consultation stage, Contact spokesman Jonathan Hill said today.

Waitahora still requires resource consent and Contact plans to file an application in the second half of the year, Baldwin said. After a two-year construction period the wind farm could be generating power in 2013, he said.

The project "is located in the closer to electricity demand centres, and harnesses a very strong wind resource," he said.

By Jonathan Underhill

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