Hawaii plan canned
Gisbourne Herald, Wednesday, February 11, 2015 (excerpts)
GISBORNE (New Zealand) -based energy and logistics company Eastland Group Ltd has pulled the plug on a potential $10 million investment in a project to build a geothermal power plant in Hawaii.
More than two years after the idea was first mooted, Eastland Group chief executive Matt Todd yesterday confirmed the company decided last month not to take the process any further.
While disappointing, it was very much “business as normal” for the company.
“On the balance of probabilities we felt that further participation was unlikely to yield an economic project in the near future and so Eastland Group has fully exited its involvement in the Special Purpose Vehicle,” said Mr Todd....
Eastland Group’s investment in building a 25MW plant on Hawaii’s Big Island would have been as a 20 percent partner, costing $5m-$10m, with Innovations Development Group (IDG) and the Office of Hawaiian Affairs.
Eastland Group had an investment option in the project through its relationship with Hawaii-based IDG in geothermal projects in eastern Bay of Plenty (NZ). In 2012, it wrote-off a $1.25m loan to IDG associated with this option.
Eastland Generation Ltd’s subsidiary company Eastland Hawaii Inc first made a bid to Hawaiian Electric Company (HELCO) to build the plant in 2013, with a decision expected to be made in September of that year.
Mr Todd said all costs associated with the work done in Hawaii were part of the company’s business development budget. Expenses, including the $1.25M loan to IDG, would not be recovered....
The decision to pull out of the Hawaii deal will not affect plans for a second power plant at Kawerau, (NZ) or the company’s relationship with IDG, said Mr Todd.
Last year the company received consent for Eastland Generation’s Te Ahi O Maui (NZ) geothermal project to go ahead, with plans to build a 15MW to 20MW plant.
Mr Todd said that project was still a partnership between Eastland Generation, Kawerau A8D Ahu Whenua Trust and IDG....
read ... The rest of the article
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Geothermal moves could reshape district’s key business
by Jeremy Muir, Gisborne Herald, February 14, 2015 (excerpts)
Eastland Group Ltd’s next moves in the geothermal sector, after the disappointment of withdrawing from a bid to build a power plant in Hawaii, could shape the future of this now 100 percent community-owned business....
The big question is how it would fund such developments. It has already sought to raise outside capital to fund expansion two years ago, a process that did not reach a satisfactory conclusion....
EGL chief executive Matt Todd says they will hopefully be in a position to make a positive final investment decision for Te Ahi O Maui later this year. “How the project is funded will be a key piece of any recommendation to proceed, but there are a myriad of different ways that this could be structured, both on and off balance sheet, each with different pricing and risk implications.”
Mr Todd also clarified that the $2m loan to Hawaiian-based partner IDG was converted to equity and used to fund business development activities in Hawaii. (Translation: All gone bye bye.) “All costs have now been expensed and as such there will be no assets or liabilities on the Eastland Group balance sheet associated with Hawaii moving forward.”
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Prefer to see EGL dividend myself
Your tail piece to an insightful investigative analysis of a failed venture by the Eastland Group in Hawaii deserves its own analysis. You say: “While wishing to try to quantify community-owned EGL’s losses on this project, it is worth noting that it can only fund this because it runs its core areas of business well. It is also to be congratulated for cutting its losses when it judged the tide had turned.”
Your statement tells us, and the Eastland Group, why the story has been given editorial prominence — the public has a right to know what is going on with its community assets.
The fact remains that the true cost will never be made public because the Eastland Group and the Eastland Community Trust run their tandem operations in secret. The estimate of $3.5m to $4m may well be on the light side if it does not include the interest lost on that money had it been paid to ECT for the benefit of the Gisborne community.
You say “the company runs its core businesses well”. The core businesses are monopolies — a port and electricity distribution, the customers of which are the mums and dads in this district who contribute to its success every time they turn on a light switch. As one of them I would prefer that my contribution to that success came back to me (as cash or the equivalent in value) during my lifetime and is not used for adventures in other countries.
As for “cutting its losses”, what preliminary investigation was made about the politics of Hawaii concerning geothermal development and why was repayment of the $2 million “loan” to Hawaiian-based IDG not secured?
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Seeing as Matt Todd won't listen to me maybe he will listen to a higher authority heh heh.
"O children, how long will you love childishness, and fools covet those things which are hurtful to themselves, and the unwise hate knowledge? Turn ye at my reproof: behold I will utter my spirit to you, and will show you my words. Because I called, and you refused: I stretched out my hand, and there was none that regarded. You have despised all my counsel, and have neglected my warnings. I also will laugh in your destruction, and will mock when that shall come to you which you feared. When sudden calamity shall fall on you, and destruction, as a tempest, shall be at hand: when tribulation and distress shall come upon you: Then shall they call upon me, and I will not hear: they shall rise in the morning and shall not find me: Because they have hated instruction and received not the fear of the Lord, Nor consented to my counsel, but despised all my reproof.
Therefore they shall eat the fruit of their own way, and shall be filled with their own devices. The turning away of the simple shall kill them, and the prosperity of fools shall destroy them. But he that shall hear me, shall rest without terror, and shall enjoy abundance, without fear of evils."
IM: HELCO Geothermal Decision Due Feb 17