Koon Holdings Ltd

Electric Power Generation

As part of the Group's business strategy to generate diversified streams of recurring income, the Group acquired a stake in Tesla Holdings Pty Ltd ("Tesla Group") in July 2010. The Group currently holds 74.1% equity interest in Tesla Group.

Tesla Group is an Australian energy infrastructure company which has successfully attained capacity credit allocations from the Independent Market Operator of Western Australia. These allocations provide Tesla Group an incentive by granting a recurring source of income for the initial capital investment of power generation plants.

Tesla Group currently owns and operates a total of four diesel power generation plants of 9.9 MW each in Western Australia. Its first Picton plant was commissioned in August 2011 and the remaining three plants, namely Kermerton plant, Northam plant and Geraldton plant, were commissioned in late 2012.

Tesla Group owns and operates four 9.9 MW diesel power generation plants that provide peak power electricity in Western Australia.

Tesla Group's power generation plants are situated on the South West Interconnected System ("SWIS") electricity grid in Western Australia to provide peaking power to the SWIS under the Western Australian government capacity pricing mechanism. Tesla Group generates recurring revenue based on a two-tier revenue matrix (standby fee and actual usage fee) from the operation of its four power generation plants in Western Australia.