Capital still flows for geothermal power

Despite the global financial crisis, investment continues to flow into Australia's leading geothermal power developer, Geodynamics Limited.

Eugene Fung, a partner at law firm DLA Phillips Fox, says that the investment shows that 'despite a difficult market, there is still capital available for quality renewable energy projects'.

Geodynamics completed three successful capital raisings this year, worth over $150 million - $37.5m (May 2008), $33.5m (June 2008) and $44.1m (September 2008).

This was off the back of a successful joint venture with Origin Energy Limited (ASX:ORG) in late 2007 which raised $115m for Geodynamics' flagship Cooper Basin hot dry rock project.
Fung advised the geothermal energy company on the Origin joint venture and all three of its 2008 capital raisings.

The capital raisings place Geodynamics in a strong financial position to be able to make an investment decision with its joint venture partner, Origin Energy, on the construction of a 50MW power station next year.

DLA Phillips Fox has worked with a number of energy companies investing in renewable energy projects over the last year including wind farm projects by Meridian Energy and geothermal projects by Geodynamics Limited and ASX-listed Panax Geothermal Limited, which is focussed on prospects in the Limestone Coast in South Australia.

The Australian Government has set a goal of doubling the market share of renewable energy from 10 per cent to 20 per cent by 2020, a target that will require ongoing and substantial investment over the next decade. 

A report released by professional advisory firm Ernst & Young this month tips investment in the sector to soar to $2.3 billion a year by 2020.

The International Energy Agency's 2008 Outlook, also released this month, found modern renewable technologies would grow "most rapidly, overtaking gas soon after 2010 to become the second-largest source of electricity behind coal".

Eugene Fung, Partner
Tel: +61 7 3246 4048
Email: eugene.fung@dlaphillipsfox.com

Clare Buttner, Media Consultant
Tel: +61 2 9286 8400
Email: clare.buttner@dlaphillipsfox.com