Australian Power Producers May Issue $13bn to Power Plants

7 February 2011 (Last Updated February 7th, 2011 18:30)

Australian power producers may issue as much as $13.2bn in debt to finance new gas-fired plants and wind farms, according to global rating agency Fitch Ratings. The agency said that the government plans to tackle climate change by imposing a price on burning fossil fuels such as coal, wh

Australian power producers may issue as much as $13.2bn in debt to finance new gas-fired plants and wind farms, according to global rating agency Fitch Ratings.

The agency said that the government plans to tackle climate change by imposing a price on burning fossil fuels such as coal, which accounts for more than 80% of power production in Australia, reports Bloomberg.

According to Fitch, the rest of the forecast spending amount, about $25.5bn through 2016, may be funded by power generators in Australia with cash and share sales.

A Fitch analyst Arnon Musiker told Bloomberg that the risk in planning new plants lie in market perceptions that the companies are raising more debt than their business profiles can support.