2007

Marubeni Corporation to invest in California wind developer to break into North American markets

Dec. 4. 2007
Marubeni Corporation


Marubeni Corporation (“Marubeni”) announced today that it will acquire a controlling interest (56.3%) in Oak Creek Energy Systems, Inc., a wind energy developer located in Tehachapi, California (“OCES”) through a US$21.5 million equity investment to obtain 1.3 million shares (out of which US$ 4.9 million is a warrant for the purchase of additional 300,000 shares) in order to break into the North American wind energy market.   
The transaction has been permitted by the State of California and subsequently has been approved by a majority vote of Oak Creek’s shareholders on November 30, 2007.

OCES is a mid-sized developer pioneering in wind farm development, construction and operation in Mojave, California, one of the major wind farm districts. With more than 20 years experience, OCES currently has more than 5,000MW of wind energy projects in its development pipeline in the US Southwest.   

The main feature among them would be the Alta Wind Energy Center, a joint development with Australian Investment Bank, Allco Finance Group which will provide the generation capacity of 1,550MW to Southern California Edison under the largest wind based power purchase agreement in the US which has been executed in December 2006. 
The Alta Wind Energy Center will be constructed over five years beginning in 2010 which will require an investment of approximately 300 billion yen. The Alta project is structured in a manner that OCES manages technical development such as wind assessment, land acquisition and permitting and operation and maintenance after commissioning, and Allco manages financing and constructing of the project. Marubeni, by this investment will not only help OCES fulfill its development obligations resulting from the groundbreaking 1,550MW power purchase agreement with Southern California Edison but also will support OCES with wind turbine procurement and finance through its experience and know-how in power business. Marubeni will also seek for opportunities to invest in the Alta Wind Energy Center project. 

Installation of wind energy in the US has been increasing 25% on a yearly basis. Above all, the State of California has been aggressively promoting wind energy by setting targets to provide up to 20% of the energy consumed through renewable energy by 2010. The aggregate capacity of wind energy installment which is currently around 2,300MW will be significantly increased by the completion of this 1,550MW Alta Wind Energy Center.

Marubeni has positioned overseas power business as one of its core businesses and has invested in power projects in gross capacity 18,627MW in 20 countries. Currently owning and operating 210MW of wind power projects (five domestic and two in Korea), Marubeni will aggressively pursue its plans for development of wind projects throughout North America by setting a wind energy resources footprint with this investment.
The transaction is subject to a number of standard closing conditions as well as dissenters’ rights of OCES shareholders.

Oak Creek Energy Systems
Incorporated :1982
Location  :Tehachapi, California
Business  :Wind power development, operation and management of wind power plants
Owner’s Equity :US$2.7million
Operating Assets :34.5MW
Development Pipeline :1,550MW (Alta Wind Energy Center)   3,500MW in California, Nevada, Texas

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