7th Oct 2005 10:36
Renewable Energy Generation Ltd07 October 2005 7 October 2005 Renewable Energy Generation Limited ("REG") Operational Update Highlights •Continued investment in UK renewable energy sector with the purchase of 24 projects from npower •In order to continue REG's success, it is the Directors' intention to explore a further equity fundraising in the near future •REG confirms its intention to recommend a 4p per share dividend for the year ending 30 June 2006, its first financial year, and a dividend of 6p per share for the year ending 30 June 2007* Renewable Energy Generation Limited ("REG"), the AIM listed investor inrenewable energy generation projects, today announces that it has entered intoan agreement to purchase a portfolio of 24 wind projects in the UK from npowerrenewables Limited ("NRL"), a wholly owned subsidiary of The RWE Group of theUK. The total portfolio exceeds 75MW and the assets are spread throughout Englandand Wales. The projects comprise distributed or 'embedded' generation in rurallocations, typically utilising 2 or 3 modern turbines. This approach is directlyin line with the government's aim to make electricity supply less dependent uponcentralised large power stations. By generating closer to the end-user, powerlosses in overhead lines are reduced and greater value is gained per unit ofgeneration. In addition, a more diverse national power supply is created. Eachproject should typically produce enough electricity to meet the annual needs ofseveral thousand people in the surrounding area. The portfolio contains projects at various stages of planning consent. A numberhave already gained planning consent, and the majority are well advanced in theprocess. REG intends to commence construction on the consented sites as soon asis practicable. Each of the projects should enjoy a well above average windresource and hence, REG believes, can generate electricity very competitivelyover the next two decades making a positive contribution to the UK's requirementfor environmentally sound energy production. The seller, NRL, is the UK's leading wind farm developer and operator, and isconcentrating its efforts on larger projects. The consideration for theportfolio is up to £4.0m (excluding any VAT or other tax) and will be paid fromREG's existing cash reserves. The acquisition is being effected through arecently purchased subsidiary of REG, The Cornwall Light & Power Co. Limited("CLP") which is already operating 14 turbines at Goonhilly Downs in Cornwall.CLP was purchased by REG in June 2005. Lithuania In addition, REG has recently agreed heads of terms for a development agreementwith Baltic Natural Energy Company ("BNE") of Klaipedia, Lithuania. Thisinvolves the development of some 51 MW of wind energy projects in Lithuaniawhich would be purchased under policies adopted by the Lithuanian governmentpursuant to its treaty obligations to the European Union. BNE has constructed a5.4 MW project at Palanga, Lithuania. Fund raising REG now has a portfolio of renewable power projects in Eastern Europe and the UKeither in operation or ready for immediate development. This was the statedstrategy of REG at the time of its IPO and has been realised ahead of schedule.In particular almost 70% of the initial net IPO proceeds has now been investedand the balance already allocated for investment within the existing portfolio,which currently has an overall projected average IRR in excess of 16%. Both the existing portfolio and the potential new opportunities will requirecapital investment to make fully operational and for this reason it is theDirectors' intention to explore a further equity fundraising shortly. Based onthe acquisitions to date, REG now has a portfolio of more than 250MW of projectsand intends, subject to funding, to build and operate more than 300MW ofrenewable assets. Furthermore, REG confirms its intentions first stated at the time of IPO torecommend a 4p per share dividend for the year ending 30 June 2006, its firstfinancial year, and a dividend of 6p per share for the year ending 30 June 2007*. Beyond this, the Directors will seek to maintain a progressive dividendpolicy reflecting the potentially attractive cash flows available from thedevelopment of its wind energy portfolio. Mike Liston, Chairman of Renewable Energy Generation (REG) Ltd said: "Our team's international experience and agility has quickly secured a diverseportfolio of renewable energy projects and identified attractive furtheropportunities for sustainable growth in this dynamic sector. With issues such as environmental concern and security of supply prevalent inpublic debate, we believe that there is a lucrative niche for renewables in theEuropean energy markets. Having the right people in the right place at the righttime remains our unique strength" -ends- Contacts: Andrew Whalley - Renewable Energy Generation Ltd - 01483 400425 Andrew Dawber - Numis Securities Ltd - 020 7776 1592 Paddy Blewer - College Hill - 020 7457 2074 * The intention to recommend these dividends is based on a number ofassumptions, and there can be no guarantee that REG will pay the amount ofdividends indicated above. The statement of intention with regard to dividendsis not, nor should it be taken as, a forecast of profits. Payment will besubject to sufficient profits being available. It may be necessary for REG toreduce its share premium account in the future. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
WIND.L