Meridian Energy (NZSE:MEL) Ramps Up Solar Ambitions With $300 Million Te Rahui Joint Venture

• Meridian Energy Limited and Nova Energy Limited recently completed agreements to form a 50-50 joint venture for the 400MW Te Rahui solar farm near Taupo, with $300 million in financing secured for the first phase and project offtake agreements established.
• With the first stage set to deliver power by mid-2026 and both phases expected to supply electricity for around 100,000 homes, this renewable initiative underscores a significant expansion in New Zealand's solar generation capacity.
• We'll explore how the Te Rahui joint venture and secured financing could influence Meridian's renewable energy investment narrative.

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Meridian Energy Investment Narrative Recap

To be a Meridian Energy shareholder today, you need confidence in the company’s ability to expand renewable generation capacity while managing earnings volatility caused by both hydrological risks and significant project investment. The Te Rahui solar joint venture with Nova Energy and secured $300 million financing could help support Meridian’s core growth catalyst, delivering on large-scale renewables, but does not materially reduce the biggest near-term risk: sustained earnings and dividend pressure tied to poor hydro inflows and rising project costs.

One of the most important recent company announcements is Meridian’s reported full-year 2025 net loss of NZ$452 million, reversing a profit from the prior period. This loss gives context to renewables investment ambitions, as it highlights the financial strain Meridian faces and underscores the importance of new projects like Te Rahui in strengthening future earnings as new generation assets come online.

However, investors should be aware that despite positive news on solar expansion, Meridian’s ability to maintain its current dividend may still depend on…

Read the full narrative on Meridian Energy (it's free!)

Meridian Energy's outlook suggests NZ$4.7 billion in revenue and NZ$515.3 million in earnings by 2028. This reflects an annual revenue decline of 0.9% and an earnings increase of NZ$967.3 million from the current earnings of NZ$-452.0 million.

Uncover how Meridian Energy's forecasts yield a NZ$6.35 fair value, a 8% upside to its current price.

Exploring Other Perspectives

Fair value estimates from six Simply Wall St Community members span NZ$0.004 to NZ$9.54, reflecting widely different opinions on Meridian’s outlook. While new renewables could lift future earnings, ongoing losses and risks to dividend sustainability mean performance expectations remain divided, see how your view compares.

Explore 6 other fair value estimates on Meridian Energy - why the stock might be worth as much as 63% more than the current price!

Build Your Own Meridian Energy Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Meridian Energy research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Meridian Energy research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Meridian Energy's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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