Shoreline announces sale of Tonga's power generation to NZ's Northpower [1]
Friday, November 3, 2006 - 22:50. Updated on Sunday, November 2, 2014 - 18:27.
Shoreline Power, Tonga's sole power generator signed a "Preliminary Sale Agreement" with Northpower of Whangarei, New Zealand, on October 31, Soane Ramanlal, the Chief Executive Officer for the Shoreline Group of Companies announced this afternoon in Nuku'alofa.
Soane said that the agreement was the first step toward finalising a transaction agreement and the sales of Shoreline Power's assets to Northpower. However, he said there were still a number of conditions to be agreed upon.
The three parties to the sale, the Government of Tonga, Shoreline Power and Northpower must agree on a regulatory framework.
Soane explained that the regulatory framework would set out conditions to protect the interests of the consumers and also to protect the interests of the investor, Northpower.
During the next two months Soane said that parties to the sale hoped to be able to finalise the deal. It is anticipated that by early next year Northpower will be operating Tonga's electricity generation.
In 1998 Shoreline took over the business of electricity generation from a government enterprise, the Tonga Electric Power Board, at a time when Tonga's power supply was in a very bad state, with numerous long power cuts.
Soane said that since Shoreline took over they had invested in new power generators for Tongatapu, 'Eua, Ha'apai, and Vava'u. Shoreline had also improved the distribution network and they had cut down on power wastage from a high of 20% to between 10% and 12%. Soane said that the Tongan Government and Shoreline were confident that Northpower with its expertise in the business wwould be able to maintain the high standard that, "we have achieved but will also further develop Tonga's power supply."
Soane also believed that for a foreign company such as Northpower to invest in Tonga, it would also open the door for other foreign investors to invest in Tonga.