UPDATE: Infigen Says May Revisit U.S. Wind Farm Sale

Infigen Energy Ltd. (IFN.AU) Chief Executive Miles George said Wednesday that the company will consider making a second attempt to sell its U.S. wind power assets after its most recent effort was hampered by a sharp fall in energy prices and wind speeds.

"We certainly wouldn't rule it out," George told Dow Jones Newswires in an interview. "We have a working assumption at the moment that we're going to be holding those assets for a minimum of two years but we wouldn't rule out a sale in the future."

His comments helped add momentum to a rally in Infigen's securities on Wednesday, initially triggered by it confirming it has made an Australian government shortlist to potentially receive assistance under the A$1.5 billion Solar Flagships subsidy.

Sydney-based Infigen's securities took a hammering last month when it said it will hold onto the U.S. assets, representing a big strategy backflip for the company, which wanted to use the sale proceeds to invest in its Australian wind farm development pipeline.

George said the U.S. portfolio, which analysts said could have attracted bids near A$2 billion, contains quality assets that Infigen is currently focusing on operating efficiently. "We're happy to hold those assets until market conditions are such that (a sale) is a possibility again," he said.

He said Infigen could sell the assets before two years time if it gets an attractive offer.

The company said last month that a range of bidders that had expressed an interest in the U.S. assets in November had since changed their position due to the sharp drop in U.S. energy prices, slow wind speeds and more regulatory uncertainty sparked by the outcome of climate change talks in Copenhagen.

While wind speeds are already improving as an El Nino weather pattern subsides, George said U.S. energy price are yet to increase.

"The long term prospects of the U.S. economy do seem to be improving," he added. "To the extent that that improves at a general level there should be a flow through into energy and electricity prices."

For the first round of the solar flagship program, Australian lawmakers announced late Tuesday that four projects have been shortlisted to build a large-scale solar photovoltaic power plant, while another four have been shortlisted to build a large solar thermal plant.

Another two projects will be selected at a later date in round two.

Infigen's joint venture with Suntech Power Holdings Co. Ltd. (STP) is on the solar PV shortlist along with AGL Energy Ltd. (AGK.AU), Hong Kong-listed CLP Holdings Ltd. (CLPHY) subsidiary TRUenergy and BP Plc (BG.LN).

The winner will be announced in the first half of 2011.

In the meantime, George said Infigen and Suntech will develop a proposal over the next nine-to-12 months to show the government.

George declined to put a cost estimate on the project, other than saying that about a third of the funding would come from the government, with the rest to likely to come from state governments and some project financing, and perhaps equity from an extra joint venture partner.

New South Wales and Victoria states have committed to provide funding of up to A$120 million and A$100 million respectively to the selected project, he said.

The Infigen and Suntech JV is proposing to build 195 megawatts of generating capacity, spread over three sites in NSW and Victoria, that probably won't be operational until 2015.

"Solar power is certainly a medium-to-longer term aspiration, George said. "We would see wind energy as continuing to have by far the largest proportion of our total generating capacity in Australia."

The four shortlisted bidders for solar thermal are Spain's Acciona SA (ANA.MC), Parsons Brinckerhoff Inc. (PBH.XX), Wind Prospect Group Ltd. and Transfield Services Ltd. (TSE.AU).

At 0502 GMT, Infigen stapled securities are up four cents, or 5.1%, at 82.5 cents.

-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; [e-mail]