BBP ANNOUNCES RETAIL CONTRACTBabcock & Brown Power (ASX:BBP)...

BBP ANNOUNCES RETAIL CONTRACT
Babcock & Brown Power (ASX:BBP) announces that it has entered into a
substantial electricity supply contract with BHP Billiton, a global resources
company (“the counterparty”) for its existing Olympic Dam operations in South
Australia (SA). The agreement is an important step in the company’s efforts to
reduce earnings volatility in its merchant portfolio.
Key highlights of the retail contract include:
· Two year term – the contract is for two years commencing on 1 July 2009.
· 105MW average load – the average estimated load is 105MW.
· The contract is priced in line with BBP’s forward outlook – pricing is in
line with BBP’s expectations for SA in FY10 and FY11.
· Strong counterparty – Standard & Poor’s credit rating for the counterparty is
A+ with a stable outlook.
· REC pass through – the cost of RECs is passed on to the counterparty at an
agreed price under the contract.
· CPRS risk factored in – expiry of the contract currently coincides with the
proposed commencement of the CPRS scheme.
Ross Rolfe, Chief Executive of BBP, said: “The finalisation of this contract marks
a further important step in management’s efforts to stabilise BBP’s earnings. This
agreement, along with the recently announced Flinders Osborne Trading
transaction and the completion of the Alinta EATM and Kwinana transactions,
provides clear evidence of the progress being made in dealing with key
challenges facing the business.”
ENDS