The Australian bank Investec has said it will make available funds of up to Aus$250m to support the development of Carnegie Corporation's Commercial Demonstration Wave Power Project. In an announcement made this week (14th April) the two companies unveilled a Heads of Agreement which sets out their mutual intention to work together to develop the project.

The vehicle for the project will, says the bank, be a special purpose company jointly owned by Carnegie, Investec and other investors, making the financing non-dilutionary for Carnegie Corporation Limited shareholders.

The Commercial Demonstration Project is the subject of a Federal Government funding application and, as such, details of the project are commercial-in-confidence, the companies explained in a join statement. The HoA is also conditional upon the successful outcome of this funding application. Carnegie continues to carry out feasibility studies at its portfolio of potential project sites across southern Australia and expects to be able to announce the site of the Commercial Demonstration Project in mid-2009.

Upon execution of formal contracts, Investec will secure the first right of refusal for three years to finance Carnegie’s CETO projects that connect into the Australian National Electricity Market and in New Zealand. Carnegie will also immediately issue Investec 1,000,000 unlisted options over Carnegie Corporation shares with an exercise price of $0.31 per share. The HoA will remain “non-binding” until formal agreements are executed.

"We are very pleased to be working with a specialist bank that has the track record of Investec", said Carnegie Corporation’s managing director, Dr Michael Ottaviano. "This is another positive step forward in the development of CETO and in the realisation of Carnegie’s Commercial Demonstration Wave Power project."

Investec's Peter Mansfield said: "Investec looks forward to working with Carnegie to develop the Project, which is complementary to Investec’s expertise in delivering innovation and value for money in renewable power. Carnegie is a market leader in the field of wave energy, having made considerable progress over recent years. Investec believes that Carnegie is well placed to deliver Australia’s first wave energy project in the near future."