Macquarie Bank announces final close of Canadian Infrastructure Partnership and third asset investment

14 May 2004

Macquarie Essential Assets Partnership (MEAP; the Fund), Canada’s first infrastructure fund focusing on essential assets, today announced that it had secured a further C$130 (A$134) million commitment from Canadian investors which include Teachers’ Retirement Allowances Fund Board and a subsidiary of BMO Nesbitt Burns. MEAP has now achieved total final commitments of C$460 (A$476) million.

Consistent with intentions at the time of MEAP's establishment in May 2003, the Fund will now be closed to new investors as it has reached its intended target size of between C$400 million and C$500 million.

In addition, MEAP has completed its third investment, acquiring a further 18 per cent interest in the Michigan Electric Transmission Company LLC (METC). The stake was acquired from a subsidiary of Macquarie Bank which underwrote the initial acquisition of the stake in METC in December 2003. METC owns and operates a transmission network in Michigan, USA, comprising 5,400 miles (8,640km) of transmission lines and 82 substations and servicing most of the southern peninsula of Michigan. This additional investment brings the Fund's stake in METC to 36 per cent and takes MEAP's current total investments to C$116 (A$120) million out of C$460 (A$476) million in total final commitments.

"MEAP was established to provide investors with exposure to essential assets, a first in the Canadian infrastructure fund market. Total final commitments of C$460 million demonstrate a strong level of support for this fund and for Macquarie's infrastructure asset management expertise among Canadian institutions," said Mr John Roberts, Head of Macquarie Bank's Infrastructure and Specialised Funds Division.

Acquiring a further interest in the METC business is in line with MEAP's policy to acquire and hold significant investments in essential assets such as electricity transmission and distribution networks, gas and other pipelines, gas distribution networks and certain water utilities.

MEAP will continue to pursue additional investment opportunities that we expect will arise as a result of current restructuring and regulatory trends in the US and Canadian essential assets sectors, he said.

The Fund's seed investment was a 15 per cent stake in AltaLink, which owns North America's first independent electricity transmission network in Alberta, Canada.

Macquarie Bank's commitment to MEAP is C$30 (A$31) million, which it intends to hold over the medium term. Other investors in the fund are predominantly Canadian pension funds, including British Columbia Investment Management Corporation and New Brunswick Investment Management Corporation.

About Macquarie Bank's ISF Division

Macquarie Bank's Infrastructure and Specialised Funds Division currently manages A$12.4 billion of equity in infrastructure and utilities funds (as at 31 March 2004). Infrastructure investments managed by Macquarie include assets in transportation, water, telecommunications and energy sectors around the world, including UK, Germany, Spain, Portugal, Italy, Sweden, Canada, US, Australia, Korea, Japan and South Africa. Macquarie has advised on more than 30 assignments relating to essential assets in Canada over the past five years.

MEAP is one of five infrastructure funds established by Macquarie in overseas markets where the equity has been raised predominantly from institutions in those markets. The other funds include:

• African Infrastructure Investment Fund (AIIF) - an unlisted fund investing predominantly in South African infrastructure projects. AIIF was established in early 2004 as a joint venture between Macquarie Bank and Old Mutual Asset Managers of South Africa. As at February 2004, it had raised R675 million.
• Korean Road Infrastructure Fund (KRIF) - Korea's first private infrastructure fund established through a joint venture between Macquarie Bank and Shinhan Financial Group. As at 31 March 2004, KRIF had managed equity of Won 335 billion from predominantly Korean institutional investors.
• Macquarie European Infrastructure Fund (MEIF) - the first pan-European dedicated infrastructure fund with commitments of €427 million. MEIF is targeting investments in infrastructure and related assets in certain European OECD countries, potentially including electricity and gas transmission and distribution networks, water and sewerage companies, rail and related infrastructure, airports, communications infrastructure and toll roads
• South Africa Infrastructure Fund (SAIF) - established in mid-2000 through a joint venture between Old Mutual Asset Managers of South Africa and Macquarie Bank, the R598 million (as at 31 Match 2004) SAIF fund is fully invested. The fund targets infrastructure investments in sub-Saharan Africa and holds interests in three privately funded highway projects in South Africa.

About Teachers' Retirement Allowances Fund Board

Teachers' Retirement Allowances Fund Board is responsible for managing the Teachers Retirement Allowances Fund (TRAF), which provides pension benefits to over 27,000 past and present public school teachers in the Canadian province of Manitoba. At the end of 2002, TRAF had C$1.8 billion of assets available for benefits. For more information on TRAF, visit www.traf.mb.ca.

About BMO Nesbitt Burns

BMO Nesbitt Burns, a member of BMO Financial Group (TSX, NYSE: BMO), is a full-service North American investment bank offering corporate, institutional and government clients access to a broad range of products and services including equity and debt underwriting, corporate lending and project financing, merger and acquisition advisory services, merchant banking, cash management services, research, sales and trading. Through offices in more than 20 locations in North America and around the world, BMO Nesbitt Burns works proactively with clients matching innovation and expertise with a diverse and integrated product base to provide the right financial solution. For more information on BMO Nesbitt Burns, visit http://corporate.bmo.com.

For further information please contact:

Erica Sibree
Investor Relations
Macquarie Bank Limited
Tel: (612) 8232 5008
Mobile: (614) 1302 6309

Media Enquiries
Jane Rotsey
Public Affairs Manager
Tel: (61 2) 8232 5026
Email: jane.rotsey@macquarie.com