Australia's Macquarie Bank and America's Aquila Join Forces to Expand Global Markets for Weather Risk Management

Business Wire, August 16, 2001

Business Editors

SYDNEY, Australia & KANSAS CITY, Mo.--(BUSINESS WIRE)-- Aug. 16, 2001

Australia's leading investment bank, Macquarie Bank, and America's Aquila, Inc. (NYSE:ILA), one of the largest energy marketers and risk management companies in North America, announced today the formation of a strategic alliance to expand the US$8 billion (A$15.5 billion) global market for weather derivatives into Australia and New Zealand.

The two companies have agreed to begin marketing weather derivatives to weather-dependent Australian industries such as energy, agriculture, construction and entertainment. The agreement gives a wide range of Australian clients a unique opportunity to offset the effects of weather volatility on corporate earnings. Aquila will assist Macquarie in the creation of a Web site-based and weather-derivative pricing engine based on Aquila's worldwide model, GuaranteedWeather.com. This Web site allows users to structure and price customized weather hedges for hundreds of locations around the globe, including Australia and New Zealand.

"The Australian market is an ideal one from which to launch a weather derivatives business," said Macquarie's Treasury and Commodities Associate Director, Ted Robson. "We estimate that the agriculture industry alone has the potential to be a major user of weather derivatives."

"The weather-derivative market is just at the beginning of its global growth curve," said Ravi Nathan, general manager of Aquila's weather group.

"The partnership with Macquarie allows us to combine their top-notch derivative structuring ability with our global weather portfolio and derivative trading skills."

Aquila recently formed a similar alliance with Mitsui Marine, one of the largest insurance companies in Japan, and for several years has marketed weather derivatives in Europe through its U.S.-based organization, as well as through an alliance with Hiscox, a Lloyds of London insurance underwriter.

Australia's leading investment bank, Macquarie provides a full range of investment banking, commercial banking and retail financial services in Australia and in selected markets around the world. The Bank has been associated with a stream of major financial innovations, and ranks as one of Australia's top 30 companies by market capitalization. Since listing on Australian Stock Exchange in 1996, the Bank's growing number of shareholders have benefited from a return on equity consistently exceeding 20 percent.

Macquarie Bank and its subsidiaries operate in a range of investment banking, commercial banking and retail financial services markets in Australia and internationally. Macquarie has 4,500 staff in offices around the world -- Australia, New Zealand, Indonesia, Malaysia, Hong Kong, Japan, China, Korea, Singapore, South Africa the United Kingdom, Germany, the United States, Canada and Brazil.

Based in Kansas City, Aquila is one of the top wholesalers of electricity and natural gas in North America and an innovative provider of risk management services. The company also controls a diverse portfolio of merchant assets, including power plants, gas storage, pipeline and processing facilities. Aquila provides wholesale energy services in the United Kingdom, Scandinavia and Germany. Additional information is available at www.aquila.com. Aquila is 80 percent owned by UtiliCorp United (NYSE:UCU), a multinational energy company based in Kansas City with more than 4 million customers. It operates in the United States, Canada, New Zealand and Australia.