New 100% renewable energy investment

Meridian Energy (ASX: MEZCA) has been added to our portfolio. This is a New Zealand wind energy utility recently listed on the ASX after being part privatised by the NZ Government. The current yield is extremely good at about 9%pa, but the shares are part-paid with a further NZ50c to be paid in 2015. If adjustment is made for this future payment, the yield is still in excess of 6.5%. There are some risks. A major customer is an aluminium smelter and there is talk that this may close at some future date. Plus the NZ opposition parties are threatening to legislate to reduce retail electricity prices if elected, but the possibility is some time off.

All in all, at current prices (about 92c) we see good value.