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Plenty of buyers provide capital -- Clipper's IPO

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California's Clipper Windpower raised £75 million ($135 million) with an initial stock offering last month on the Alternative Investment Market of the London Stock Exchange. It was one of the largest offerings of the year, according to the exchange. Company founder and CEO Jim Dehlsen said the offering far exceeded the company's expectations. Clipper, now trading under the symbol CWP, had anticipated raising £70 million ($126.3 million).

"I was really delighted with the effort," says Dehlsen. "We were about 2.5 times oversubscribed and we had the major institutions that have an interest in renewables participate." The stock was offered only to European investors.

Better in Europe

Clipper chose European capital markets, Dehlsen adds, because more investors there are familiar with the wind power business. "Because wind has been so much of a European business since the 1990s, the financial markets have really grown up around wind in Europe. Their level of research and understanding the technology is much better than in the US."

Dehlsen says he will use the money to produce the company's C-93 Liberty turbine, a 2.5 MW generator unveiled earlier this year and developed with $10.5 million of support from the US Department of Energy and the California Energy Commission. "The real use is as working capital," says Dehlsen. "For the last four years we've been very much in the development mode. Now we can execute on the plan. That means ramping up manufacturing," he adds.

Clipper has just opened a manufacturing facility in an existing 50,000 square foot building in Cedar Rapids, Iowa. Dehlsen says about half the expected 150 turbines to be completed in the plant's first year have been pre-sold. He hopes by the third quarter of 2006 to be capable of manufacturing one turbine a day. The total production goal for 2007 is 250 turbines.

As a developer of wind power projects, Clipper has sold two projects in Iowa in 2003 and 2004: a 43.5 plant now owned by PPM and a 160.5 MW project sold to Mid-American, using turbines from GE Energy. The latest Clipper development is a proposed 100 MW project in Maryland that has a power purchase agreement in place with PPL Energy Plus. The first phase of that project is scheduled to be online by the end of June 2006. In all, the company has 5800 MW of wind resource rights secured. About half that total is in a single site in South Dakota, where Dehlsen hopes to develop 3000 MW of wind over the next 20 years.

Enabling activity

Dehlsen says Clipper will continue to both develop projects and manufacture. "We really see it as a way of serving the utility market," he says. "Some want to buy turbines, others want to buy projects. So I believe it's a very effective way to service the market. We'll stay under one umbrella, but the real Clipper story is our turbine and our technology. The project development is more of an enabling activity for the business."

Dehlsen says that the company is considering exporting, initially to Canada and Mexico with Brazil also a possibility, but within the year Clipper plans to be sending wind turbines to Europe. "Liberty is well suited for the offshore market in Europe," Dehlsen says. "Next year about 15% of total [production] is for the European market."

Dehlsen says the company's London office will be in charge of Clipper's entry into offshore wind turbines. It was opened last year and is headed by a former cabinet minister for the Conservative government Colin Moynihan who, among other posts, was energy minister for a short time. Dehlsen adds that the company hopes to develop a 4 MW-7.5 MW offshore wind turbine which would be available by 2008.

Dehlsen, who founded Clipper in 2001, is the former owner and founder of pioneering wind plant developer and turbine manufacturer Zond, which was bought by Enron and subsequently by GE Energy.

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