Contact Energy seeks US$316 million equity raise to lead New Zealand’s renewable energy transition

The equity raise comprises a fully underwritten placement of NZ$450 million and a non-underwritten retail offer of up to NZ$75 million.

The proceeds will enable Contact Energy to advance its renewable energy pipeline, which aligns with New Zealand’s broader decarbonization goals and the anticipated 3-5TWh increase in grid demand over the next five years.

Accelerating renewable energy projects

The equity raise will fund several critical projects, including the Glorit solar PV power plant, a 150MWac project located on the Kaipara Coast near Auckland.

Developed through a 50/50 joint venture with Lightsource bp, the solar plant is expected to cost NZ$305 million and will be operational by Q3 2028. The project will be more than 70% project-financed, with funding arrangements nearing completion.

The funds will also support the Glenbrook battery 2.0, a 200MW/400MWh BESS near Auckland, which is estimated to cost NZ$235 million and will double the battery capacity at the Glenbrook site to 300MW. Tesla has been selected to supply its Megapack 2 XL technology, with construction set to begin immediately and completion expected in Q1 2028.

Additionally, Contact is advancing pre-FID drilling for the Tauhara 2 geothermal project, which could expand capacity from 50MW to 60–70MW. The NZ$30 million drilling program will refine reservoir modelling and confirm steamfield development potential, with a final investment decision targeted for FY27.

Contact Energy recorded that it is already making significant progress on its existing renewable energy projects. The Kōwhai Park solar PV plant, a 150MWac project again developed with Lightsource bp, is on track for completion by the second quarter of 2026, with more than 50% of the solar modules installed.

Additionally, the 100MW Glenbrook-Ohurua BESS is nearing completion, with commissioning underway and operations expected to begin in the first quarter of 2026.

The Te Mihi Stage 2 geothermal plant, a 101MW development, is also progressing on schedule and is expected to be operational by the third quarter of 2027. This plant will provide baseload renewable energy generation to replace output from the ageing Wairakei geothermal station.

Looking ahead, Contact Energy is keen to try and play a leading role in New Zealand’s renewable energy transition.

“Contact is ready to lead New Zealand’s renewable energy future, powering expected market growth and bringing new flexibility to support the system as it transitions,” said chair Rob McDonald.

Strong financial performance and the Manawa acquisition

In the last five years, Contact has committed NZ$2.4 billion to renewable energy projects, including the investments announced today, and follows a strong financial performance for the company.

Contact Energy reported a net profit of NZ$205 million for the six months ending December 31, 2025, a 44% increase from the previous year.

Operating earnings (EBITDAF) rose 24% to NZ$500 million, driven by the acquisition of Manawa Energy and a significant uplift in renewable energy generation. The company’s renewable energy output reached 97% during the period, supported by hydro inflows at 128% of the mean and the addition of Manawa’s hydro assets and power purchase agreements (PPAs).

The acquisition of Manawa Energy has been a cornerstone of Contact’s growth strategy, contributing to an 80% increase in operating free cash flow to NZ$249 million. More than 80% of the acquisition cost has already been realised, with NZ$6 million recognised in 1H26.

“1H26 was transformational, with the completion of the Manawa acquisition and the welcoming of its people and assets to Contact,” said CEO Mike Fuge.