Overseas investment decision for case 200620018 - Contact Energy Limited

The application has been approved as it met the criteria.

The Overseas Investment Office is satisfied that the individuals with control of the Applicant collectively have business experience and acumen relevant to the overseas investment, and that the Applicant has demonstrated financial commitment towards the overseas investment. The Overseas Investment Office is further satisfied that each individual that exercises control over the Applicant is of good character and is not an individual of the kind referred to in section 7(1) of the Immigration Act 1987.

Contact Energy Limited (Contact) is applying for consent to acquire the freehold estate in the subject land (Lot D) from Landcorp. Contact has identified an operational need to acquire the freehold estate in Lot D for purposes associated with its geothermal electricity generation business based at the Wairakei and Poihipi geothermal power stations. Contact already holds a registered encumbrance, easement, and profit-a-prendre (the Energy Field rights) over Lot D, and other land in the Taupo region.

Historically the existing arrangements provided for Landcorp to be able to farm the surface of the land overlying the geothermal field pending development upon it of geothermal facilities. The Energy Field Rights granted to Contact enable it to install equipment on and under the surface, and extract geothermal energy from the subsurface, and if required for operational purposes, to obtain the underlying freehold interest if Landcorp elected to sell its interest via a right of first refusal.

The Energy Field Rights were granted to Contact at the direction of the Crown as part of the disestablishment of Electricity Corporation of New Zealand and the establishment of Contact. Contact's rights are part of the geothermal assets that Contact purchased from the Crown/ECNZ in 1997 for valid consideration. The Energy Field Rights remain in perpetuity and will remain in place if the land is sold. Landcorp has now entered into an agreement to sell Lot D to a third party. In terms of the right of first refusal conferred by the Energy Field Rights, Contact has exercised its right of first refusal in relation to Lot D.

The proposal is likely to result in the following benefits:

1. the creation of new job opportunities and to the retention of current staff connected with the Wairakei operations that might otherwise be lost;
2. increased production of energy through geothermal activity, which is likely to lead to enhanced domestic services in New Zealand;
3. the introduction of additional investment for the development of new electricity generation;
4. the owner of the relevant land undertaking other significant investment in New Zealand with the proceeds of sale;
5. the giving effect to and the advancement of the Government's strategy on renewable energy resources;
6. the enhancement of the ongoing viability of other overseas investments undertaken by Contact;
7. Contact has previously undertaken investments that have been and are of benefit to New Zealand.