Eastland Group raises capital to support geothermal projects in New Zealand
Te Ahi o Maui is Eastland Generation's inaugural geothermal power plant. It is one of several well-performing assets included in the capital raise. (source: Eastland Generation)
Carlo Cariaga
13 Nov 2023
Eastland Generation has sold 50% interest to Obayashi Corporation, thus raising capital to support an active pipeline of geothermal projects in New Zealand.
Eastland Group has announced a successful capital raise via the sale of 50% interest in Eastland Generation to Japan-based international construction and engineering company Obayashi Corporation. The transaction is underpinned by an enterprise valuation for Eastland Generation in excess of $500 million.
The capital raise follows a competitive process to find a suitable partner in order to provide capital to fund a significant pipeline of renewable generation projects in New Zealand and to provide expertise and capability to support and accelerate these projects and other identified opportunities.
Obayashi Corporation is an international construction and engineering company, listed on the Tokyo Stock Exchange, and has significant renewable energy development and operational experience in Japan, with a commitment to decarbonisation and accelerating opportunities in the green energy sector.
The company has been operating in New Zealand since 2011 and has delivered several significant projects such as New Zealand’s first megawatt-class green hydrogen production facility, Halcyon Power.
“This partnership marks an exciting time for our business, shareholder, and stakeholders,” said Matt Tod, Chief Executive of Eastland Group. “Eastland Generation and Obayashi are aligned in their values regarding environmental consciousness, relationship management, emissions targets, and dedication to sustainable energy in New Zealand, making this an excellent partnership.”
“There is also strong strategic alignment, and we are now geared to accelerate our pipeline of projects, expand our operational capacity, and advance innovation within the renewable energy industry.”
“Obayashi is delighted to be partnering with Eastland Group through this investment in Eastland Generation, and we are excited about the potential for further growth in renewable energy in New Zealand,” added Dr Kenichi Ando, Obayashi Corporation’s Head of Green Energy Division.
“We look forward to working closely with all stakeholders to deliver on Eastland Generation’s ambitions and to execute on the attractive green energy development opportunities ahead of us.”
Capital to support a pipeline of projects
The capital raise includes three geothermal generation assets in the central North Island, Te Ahi o Maui (26MW), Geothermal Developments Ltd (9MW), and TOPP1 (24MW), as well as a hydropower station (5MW) near Wairoa, and a soon-to-be operational utility scale solar farm (5MW) in Gisborne.
Additionally, all of Eastland Generation’s pipeline of development projects, including the TOPP2 (49MW) geothermal project, the Taheke geothermal project and other renewable energy projects are included in the capital raise.
Alice Pettigrew, Eastland Generation Chief Executive said, “Construction has commenced on TOPP2, the most advanced of our pipeline projects, bringing substantial expansion to our portfolio and solidifying our position as a major player in the development, ownership, and operation of renewable energy assets within the New Zealand market.”
“Together with Obayashi, we are excited that we will be able to achieve our goal of 100MW of renewable generation before our planned date of 2027, all the while making a substantial contribution towards moving our nation towards a 100 percent renewable electricity future. We look forward to working alongside the Obayashi team to maximise the future value of Eastland Generation and strengthen relationships with key stakeholders.”
Eastland Group’s sole shareholder Trust Tairawhiti provided a short-term investment of $30 million to support the initial development of TOPP2, ahead of the capital raise.
Trust Tairawhiti Chair John Clarke said the strategic partnership with Obayashi was a great result with strong values alignment between the partners, and their investment would support Eastland Generation to accelerate its renewable energy projects.
“Having Obayashi on board as a 50 per cent shareholder enables the company to continue to grow to the benefit of the Trust and the region. The $30 million initially invested into TOPP2 will be repaid with a good return, enabling the Trust to again better diversify its portfolio and continue to support our local communities and beneficiaries.”
Source: Email correspondence
