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Whangarei-based Northpower has reportedly signed a preliminary sale agreement to purchase Tonga's electricity generator, Shoreline Power.
By early next year Northpower will be operating Tonga's electricity generation, the Tongan company's chief executive, Soane Ramanlal, told the Matangi Tonga newspaper.
Tongan King Siaosi Tupou V has said he wants $T60 million ($46 million) for Shoreline Power, previously the state-owned Tonga Electricity Power Board, given to him by the royal-controlled government eight years ago in a 20-year lease.
Northpower has used Tongan linesmen in Northland.
Amid signs of growing popular unrest at rising power bills and the lack of democracy in the kingdom, then-Prince Tupouto'a, now king, last year said he wanted the Tongan government to buy Shoreline back.
In March this year, Prime Minister Feleti Sevele discussed a Chinese loan of $T60 million for the government to acquire Shoreline's electricity assets.
Mr Ramanal today told the Matangi Tonga newspaper the preliminary sale agreement was the first step toward sale of Shoreline Power's assets to Northpower, but 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 to set out conditions to protect the interests of the consumers and also to protect the interests of Northpower, Mr Ramanal said.
Since Shoreline took over the Tongan power supply in 1998 it had invested in new power generators for Tongatapu, 'Eua, Ha'apai, and Vava'u, and improved the distribution network.
The Tongan Government and Shoreline were confident that Northpower would be able to further develop Tonga's power supply.
Northpower reported a net profit for the year to March of $11.9 million, on operating revenue of $125.9 million, up from $105.1 million a year earlier.
It operates lines providing electricity to more than 49,300 customers in Whangarei and Kaipara districts, and owns a small hydro-electric scheme in Northland.
It runs an electricity contracting business in Northland, Auckland, Hamilton, Rotorua, Tauranga and Wellington, which earns nearly 70 per cent of Northpower's revenue.
- NZPA
