Meridian Energy is considering the sale of its 50 per cent stake in the A$1 billion Macarthur wind farm in the Australian state of Victoria to book gains made available by the global drop in interest rates.
The state-owned enterprise's chief executive, Mark Binns, said the company stood to earn a "bond-like" return over the 25-year life of its joint venture arrangements for the massive 420MW windfarm, which it is building with Australian energy generator and retailer AGL.
The project is expected to be producing full power early this year and will be the largest in the Southern Hemisphere.
Meridian won an international award for the way the finance arrangements were structured in a ground-breaking deal announced in September 2011 under previous chief executive Tim Lusk, whom Binns replaced almost a year ago.
"The way Macarthur is structured, we don't participate in the ups and downs of the electricity market," said Binns, who confirmed Meridian was "considering exiting" its stake in talks that include AGL. "It's an AGL risk. It doesn't totally fit with our strategy."
By comparison, its 70MW Mt Millar windfarm in South Australia is wholly owned and operated by Meridian.
A timeframe for decisions was uncertain, but "not imminent", he said.
"We can stay in the 25-year deal, or we can look at selling. While interest rates are low, there's a profit to be made."
He would not be drawn on whether an exit from Macarthur could see a capital return to the Government ahead of the proposed partial privatisation of Meridian, the most valuable of the three SOE power companies, independently valued at $6.5 billion in 2011 in work undertaken for the Treasury's Crown Ownership Monitoring Unit.
Assuming legal challenges are overcome, the sale of up to 49 per cent of Mighty River Power is planned in the second quarter of this year, with a second partial float of either Meridian or Genesis Energy possible by the end of the year.
Treasury papers released over the Christmas break warned the Government that capital markets would struggle to absorb three partial SOE floats in one year.
There was "no link" between thinking on Macarthur and the asset sales programme, said Binns, and capital returns from the partially debt-funded investment could be used for balance sheet strengthening.
He declined to comment on the extent of debt and equity components in the Macarthur funding arrangements, although statements at the time of the deal cited "term facilities totalling A$386 million ($484 million) to complete Meridian's funding commitment to the project".
As well as Mt Millar, Meridian is due to start construction of a wholly owned 131MW windfarm at Mt Mercer, in Victoria. The company's website says construction was due to start last month, with first power forecast next year.