International Partnership for Windfarm

22 April 2005

NZ Windfarms has entered into a 'Memorandum of Understanding' with two of the region's leading wind farm developers for the development of the Te Rere Hau wind farm near Palmerston North.

The joint venture partners are NP Power Pty and Babcock & Brown Windpower Pty who are developing Lake Bonney and other major wind farms in Australia.

The partners will contribute an initial $3 million to the Te Rere Hau project. Subsequent contributions (estimated at $38 million) are conditional on the partners completing feasibility studies of the wind farm site and the Windflow 500 turbine.

The preliminary timetable is to have the first Windflow 500 installed on the site by the end of 2005 and, subject to the feasibility study, to develop a formal joint venture agreement by 30th March 2006.

NZ Windfarms is a subsidiary of wind turbine developers Windflow Technology. In its recent six-monthly report, Windflow announced that it had reached agreement with the same partners to build a demonstration Windflow 500 on Stage 2 of their Lake Bonney project in South Australia. Windflow CEO Geoff Henderson said, "The joint venture with NP Power and Babcock & Brown is an excellent relationship which we are pleased to be able to announce publicly. The relationship is one of mutual respect built up, in the case of some individuals, over the 21 years or more that we have been in the international wind business. We look forward to working with them to develop the Te Rere Hau project."

Background to the JV Partners:

• Babcock & Brown is a worldwide investment-banking group which was founded in 1977. The group has grown to 22 offices worldwide. Babcock & Brown is owned 80% by the partners and staff of the firm, and 20% by Bayerische Hypo und Vereins Bank. Babcock & Brown has extensive experience in developing energy projects, including wind farms both in Australia and overseas. Recent Australian energy projects include the Lake Bonney wind farm, the Oakey and Redbank power station developments and the acquisition of the Ecogen gas fired power stations at Newport and Jeeralang in Victoria.

NP Power is the Australian subsidiary of National Power Partners, an independent renewable energy project developer based in San Francisco and Sydney. National Power was founded in 1991 and is a private, employee-owned company whose owners have significant experience in the development, financing and construction of power and industrial projects. National Power has in-house wind farm development and meteorological expertise along with commercial business development and construction management skills. The firm has extensive experience of power sector projects including recent joint venture developments with Babcock & Brown in Australia for the Redbank and Lake Bonney projects.