Macquarie Bank led consortium to acquire Korean power facility

20 May 2005

Korea Power Investments Co. Limited (“KPIC”), an investment vehicle established in the Republic of Korea for Macquarie Bank Group, Shinhan Life Insurance, and Korea Local Administration Officials’ Mutual Fund has signed a binding agreement to purchase El Paso's 50 per cent interest in Korean Independent Energy Corporation ("KIECO"), for a total consideration of US$276 million.

KIECO is a 1800MW combined cycle LNG fired power generation facility in the Republic of Korea providing peak load power to the city of Seoul.KIECO has a long term 15-year power purchase agreement with KEPCO (Korea Electric Power Corporation). Macquarie will have a 28 per cent interest in KPIC subscribing for approximately KRW45 billion ($A56 million) in equity. Macquarie also acted as advisor and debt arranger to the consortium.

Macquarie Bank Chief Financial Officer, Greg Ward, said this is a landmark transaction for Macquarie and its Korean institutional partners, being the first investment in the Korean energy and utilities sector. KIECO is an attractive asset due to its stable and predictable cash flows, experienced management team and long term supply contracts. It is rated AA- by domestic agencies, with a stable outlook.

“This acquisition builds on the success of the Korean Road Infrastructure Fund, and provides a platform for diversification of Macquarie’s Korean business into sectors beyond transportation infrastructure,” Mr Ward said.

Macquarie Bank will explore a range of options for the consortium’s investment in KIECO, including possible transfer to a Macquarie-managed fund or sale to institutional investors.

For further information, please contact:

Matthew Russell
Public Relations
Macquarie Bank Limited
Tel: (612) 8232 4102
Mobile: (614) 1069 9532

Lotte Pang
Media Relations, Hong Kong
Tel: (852) 9805 4070

Jenny Kovacs
Investor Relations
Macquarie Bank Limited
Tel: (612) 8232 3250
Mobile: (614) 1354 6547

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