Aina Koa Pono Awarded Sustainable Biofuels Contract from Hawaiian Electric Co. and HECO’s Response

Media Release:

‘Āina Koa Pono announced today that it has been selected as the recipient of a sustainable biofuels contract from Hawaiian Electric Company. This partnership will be essential in helping Hawaii reach its clean energy goal of meeting 70 percent of its electricity and ground transportation needs from clean, renewable energy sources by 2030. ‘Āina Koa Pono – which means “for the good of the land” in Hawaiian – unveiled plans to establish a 13,000 acre Energy Farm in the Ka‘ū District of Hawai‘i Island on farm land that has been fallow for 14 years. By early 2013 the Ka‘ū Energy Farm will produce biofuels that will contribute to help increase energy independence, stabilize energy prices, help revitalize a fading agriculture industry and generate hundreds of much-needed jobs for the Ka‘ū community, which was hit hard by the economic recession.

‘Āina Koa Pono is a Hawai’i-based company co-founded by local business developers Dr. Melvin H. Chiogioji and Kenton Eldridge. The company is dedicated to the development and implementation of renewable energy solutions using innovative and proven technologies. ‘Āina Koa Pono estimates it will create a minimum of 300 construction jobs over the first two years and ultimately more than 100 permanent operation and farming jobs.

“The time has come to take a bold step toward establishing a self-sustaining energy future for our state and we are excited and honored to be selected by Hawaiian Electric Company to produce biofuels for Hawai‘i,” said Dr. Melvin H. Chiogioji. “This partnership is critical in helping Hawai‘i reduce its reliance on imported fossil fuels and expand our state’s green energy initiative.”

“We are very pleased to award this first contract as a result of our request for proposals for locally grown and processed biofuels to be used in our power plants on Hawaii Island, Oahu and in Maui County,” said Hawaiian Electric Executive Vice President Robbie Alm. “We look forward to a long and productive partnership.”

‘Āina Koa Pono will invest approximately $320 million in the Ka‘ū Energy Farm, to cover the costs of building a cutting-edge processing facility as well as planting and harvesting bio-feedstocks including sweet sorghum and eucalyptus. The Ka‘ū Energy Farm will be located on private land under long-term lease agreements with the Olson Trust and the Mallick family.

The Ka‘ū Energy Farm bio-processing plant will use the latest biomass conversion technology to transform plant matter – including unwanted invasive plant species – into usable energy products including biofuel, electricity and gasoline. ‘Āina Koa Pono is designing the plant to produce 16 million gallons of renewable biofuel. Construction of the Ka‘ū Energy Farm is scheduled to begin in the first quarter 2012, initial fuel delivery will take place by mid-2013 and the processing facility will be up to full commercial operation by the third quarter 2013.

Another goal for the Ka‘ū Energy Farm is to integrate land use for fuel and food agriculture to enhance – not harm – Hawaii’s environment. ‘Āina Koa Pono will support existing and new local food-related operations including cattle ranchers, coffee producers, macadamia nut farmers and tropical fruit producers by providing a market for and processing non-food by-products such as green waste into usable liquid fuels. In addition, ‘Āina Koa Pono will cycle bio-feedstock crops in a traditional manner to optimize land use and restore soils.

‘Āina Koa Pono’s core team is comprised of several companies experienced in designing and construction power and processing facilities including Mele Associates, Inc., Eichleay Engineers of California, Inc., Tek Gar and Bionics Fuel Technologies AG.

For more information about ‘Āina Koa Pono, visit www.ainakoapono.com.

About ‘Āina Koa Pono

‘Āina Koa Pono is a Hawai‘i-based company working to develop and implement new energy solutions to reduce the state’s reliance on fossil fuels. ‘Āina Koa Pono means “for the good of the land” in Hawaiian, the company specializes in design and construction of integrated processing facilities which will work with local businesses to produce bio-feedstocks to create energy products such as biofuel, electricity and gasoline. The ‘Āina Koa Pono team consists of several companies committed to the creation of clean, renewable energy in Hawaii, including Mele Associates, Inc., Eichleay Engineers of California, Inc., Tek Gar and Bionics Fuel Technologies AG.

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Hawaiian Electric’s Response:

Today, Hawaiian Electric Industries, Inc. (HEI) (NYSE: HE) issued the following statement in response to media inquiries regarding the potential interest of a private investor:

As a publicly traded company, we have a fiduciary obligation to our shareholders, customers and community to consider any valid proposal to purchase our company. If we receive a formal proposal, we will evaluate it, but we have nothing to date. We were contacted by Mr. Marth for the first time last night by email, but have had no discussions. As a matter of policy, HEI will not comment further on the existence or consideration of an offer in the event we receive one.

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