The company aims to provide electricity with a green energy component of between five and 25 per cent at a price equal or lower than that offered by other electricity retailers operating in NSW such as EnergyAustralia, Integral Energy, AGL Electricity, Origin Energy and Energex.
While electricity from renewable energy sources such as solar, hydro, wind and landfill gas is generally more expensive than electricity from base-load power stations, Jackgreen claims it can offer power at equal or lower prices because its service costs are lower than its competitors.
In the NSW electricity market, consumers are able to switch power suppliers. Jackgreen claims that research conducted by Millward Brown Australia has shown that 92% of people would consider switching from their current electricity supplier if a ‘greener’ alternative was available at the same price.
The company is already operating and aims to reach break-even within 12 to 15 months of listing, even though it expects to have only about 100,000 customers within three years.
According to its prospectus, Jackgreen is aiming primarily at residential customers and small-to-medium enterprises, using a three-pillared approach of ‘green, community and price’.
The community component of this involves the development of ‘genuine community partnerships’ through the company providing a donation on behalf of customers to a Jackgreen-approved charity or community organisation of the customer’s choice.
“Jackgreen believes in working closely with local communities and a proportion of Jackgreen’s revenue is used to provide financial support for environmental and charitable groups,” according to the company’s website.
Jackgreen Ltd will be created out of listed real estate developer Lion Equities Ltd. The proposed business depends on Lion Equities shareholders approving the acquisition of the Jackgreen business from its founders and the change of name and business at a meeting on November 19.
Under the terms of the prospectus, 22 million shares will be offered at 20 cents each with a capacity to accept over-subscriptions for a further 13,000,000 shares ($2,600,000) to raise up to $7 million. Priority will be given to existing Lion Equities shareholders to apply for 25,000 shares. The funds would be used to part fund Lion Equities acquistion of Jackgreen and to provide working capital for that company.
The Jackgreen offer opens on November 1 and closes on November 26. Quotation of the shares on the ASX is expected around December 10.