Renewable energy company CBD Energy has signed an agreement to acquire energy retailer, Neighborhood Energy, from Alinta Energy for $29.4 million.

 

Neighborhood Energy was established in 2006 by Alinta, with 26,000 customers by 2009 and 65,000 currently. It has a focus on the Victorian market.

 

CBD Managing Director Gerry McGowan said the acquisition, along with CBD’s alliance with two of China’s largest renewable energy companies, would put CBD in a position to challenge the larger participants in Australia’s energy markets.

 

“This is the birth of a new age integrated energy company totally focused on delivering renewable green energy combined with energy saving products,” he said.

 

“Additionally, this initiative will show our customers that clean energy is affordable and competitive with traditional fossil fuel based energy.”

 

Mr McGowan said the acquisition would provide a potential customer base for CBD’s solar and power saving products and also a wholesale buying arm for the energy the company produces.

 

CBD proposes to fund the acquisition from a combination of new debt funding and  existing cash flow. It intends to obtain new debt funding through a newly established CBD subsidiary that will acquire Neighbourhood energy on the basis that it will be non-recourse to the rest of the CBD group of companies. A $2.175 million deposit was paid by DBC to Alinta Energy on signing of the acquisition agreement.