Australian policy uncertainty prompts gas-fired power plant sale

Australian infrastructure investor IFM is seeking to sell its Ecogen gas-fired power plants, citing uncertainty over Australia‘s climate and energy policy.

Reuters reports that the sale of the two gas power plants comes as gas and power prices are soaring, while state and national leaders continue to clash over carbon emissions targets and energy policy, impacting on infrastructural investment.
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The sale process was in its early stages and information memorandums had not yet been sent to prospective buyers, an unnamed source told the news agency.

Ecogen‘s Newport and Jeeralang plants, with a combined capacity of about 1,000 MW, could be worth A$1bn, based on a replacement cost of A$1.5 million per megawatt. IFM has owned the plants since 2003.

However, analysts said it was difficult to value the ageing assets without knowing what gas supply contracts Ecogen has in place.

The power plants could attract bidders involved in the electricity market as they are essential to keeping the lights on in southeastern Australia as coal-fired power plants are closing.à‚ 

Ecogen Victoria power plants sold to Prime JV

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