Tata Power decides to acquire 10% stake in Geodynamics, Australia

Strengthens its renewable energy portfolio

The Tata Power Company Limited, India’s largest integrated private power company, today announced its decision to acquire (either by itself or through one or more of its subsidiaries in India or abroad) 29.4 million Ordinary Shares of Geodynamics Ltd., a listed Australia-based organization specializing in geothermal energy and Enhanced Geothermal Systems (EGS), representing 11.4% of the current issued Share Capital (equivalent to 10% of the increased Share Capital after allotment by Geodynamics). The Shares will be acquired by Tata Power at an issued price of A$1.50 per share, entailing a total investment of A$44.1 million (approx. INR 165 crores/INR=37.5) in absolute terms.

 

As part of the investment, Tata Power will also get a directorship on the Board of Geodynamics. In addition to the cornerstone investment above, the companies have agreed to review the potential of geothermal prospects outside Australia by leveraging the companies’ respective strengths. Further, this alliance also helps in securing a foothold in the growing renewable energy market in Australia.

Geodynamics is the industry leader in EGS with a market capitalization in excess of A$350 million (August, 2008). Geodynamics has geothermal exploration interests in 3 Australian states including the license for exploring 2000 sq. km of area in the Cooper Basin. Geodynamics tenements in the Cooper Basin contain the hottest granites on earth and are estimated to provide a thermal resource equivalent of 50 bn barrels of oil.

Mr. Prasad Menon, Managing Director, Tata Power said, “We are happy to have decided to purchase a stake in Geodynamics. This strategic partnership not only strengthens our renewable portfolio but also creates opportunities to get a foothold in the growing renewable energy Market in Australia. We look forward to the synergistic opportunities that the alliance presents us.”

Mr. Gerald Grove-White, Managing Director, Geodynamics Limited, commented "We are excited about this strategic partnership with Tata Power which we hope to expand into other areas of common interest. There are great synergistic opportunities for both the groups."

Geothermal energy is the natural heat found within the earth, where temperature increases with depth, typically by 10-50 degree Celsius/km. In Enhanced Geothermal Systems (EGS) technology heat is extracted from granites located at a depth of a more than 4000 Metres by circulating water through them in an engineered artificial reservoir. The heated water returns to the surface under pressure and is converted into electricity via a heat exchanger and conventional geothermal power plant.

EGS technology can potentially enable the setting up of base load power plants that are based on naturally heat and thereby making them a clean energy source for the future.

About Geodynamics Limited:
Geodynamics Limited was registered as a public company in November 2000. The Company was formed solely to focus on developing renewable geothermal energy generation from hot fractured rocks (HFR) in Australia.The Company was formed by Dr. Doone Wyborn and Dr. Prame Chopra from the Australian National University in Canberra (leading experts in HFR geothermal energy), and Dr. Bertus de Graaf, who has a track record in resource development. Geodynamics was funded by initially raising more than $1 million dollars in seed capital in 2001. It then secured two geothermal exploration licences in South Australia and two in New South Wales, including its outstanding world class resource in the Cooper Basin. After successfully raising $11.5 million, Geodynamics listed on the Australian Stock Exchange on 12 September 2002, and together with a $5 million R&D Start grant from AusIndustry it initially had gross funds of $16.5 million for its Stage 1 development program. The Company raised a further gross of $61.6 million to the end of 2005 to support its Stage 1 program and also fund the licence acquisition of the patented Kalina Cycle heat to power conversion cycle. In 2007, the Company successfully completed a $49.8 million raising under its Prospectus dated 14 March. The funds were used partly to pay for the purchase and shipping of a new $32 million advanced drilling rig that arrived in Australia on 30 June 2007 as well as the drilling of the Habanero 3 production well and the completion of the Stage One reservoir circulation test..

About Tata Power:
The Tata Power Company Limited is India's largest integrated private sector power utility with an installed generation capacity of over 2300 MW. The company has emerged as a pioneer in the Indian power sector, with a track record of performance, customer care and sustained growth. Tata Power has a presence in all the segments of the power sector viz generation (thermal, hydro, solar and wind), transmission and distribution. The Company has established global footprint by acquiring 30% stake in Indonesian Coal Mines and its 4000 MW Ultra Mega Power Project at Mundra (Gujarat) is on fast track. It has successful public-private partnerships in generation, transmission and distribution- North Delhi Power Limited with Delhi Vidyut Board for distribution in North Delhi, ‘Powerlinks Transmission Ltd.’ with Power Grid Corporation of India Ltd. for evacuation of Power from Tala hydro project in Bhutan to Delhi and ‘Maithon Power Ltd.’ with Damodar Valley Corporation for a 1050 MW Mega Power Project.

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