Infrastructure funds announce equity partnership to build a greenfield power plant

Energy Investors Funds (EIF), an energy-focused private equity firm, and I Squared Capital, an independent global infrastructure investment manager, have formed an equity partnership to develop the Oregon Clean Energy Center (OCEC) in USA.

The OCEC is a greenfield 869 MW combined-cycle natural-gas fired generation facility to be located in Oregon, Ohio. EIF, through one of its private equity funds, EIF United States Power Fund IV, L.P. (USPF IV) and I Squared Capital, through its ISQ Global Infrastructure Fund, are equal partners in the project.

OCEC will use two Siemens SGT6-8000H gas turbines and one steam turbine. The plant’s output will play a critical role in the Pennsylvania-New Jersey-Maryland (PJM) wholesale electricity market, which is slated for 12,000 MW of coal plant retirements in the near future.

The plant is expected to begin commercial operations by July 2017.

Lucas Missong, Senior Vice President at EIF stated:

“We’re happy to have closed on our equity partnership and debt financing, which will allow OCEC to begin construction. This project will provide efficient electricity for a marketplace where new, cleaner generation is sorely needed.”

Adil Rahmathulla, Partner at I Squared Capital commented:

“I Squared Capital’s investment in OCEC is consistent with our strategy of investing in clean, efficient generation that will benefit from the new paradigm, arising from abundant natural gas and environmental regulations, in the U.S. electricity market. OCEC will serve a growing customer base in the world’s largest wholesale electricity market while reducing emissions.”

OCEC was approved by the Ohio Power Siting Board in May 2013 and has been developed by North America Project Development, LLC (NAPD), utilizing loans from USPF IV. NAPD will retain an interest in OCEC going forward.

BNP Paribas acted as the exclusive financial advisor to EIF and OCEC on this transaction. The law firm of Orrick, Herrington & Sutcliffe represented OCE and EIF in the development, commodity hedging and debt financing of the project, and in raising the necessary equity financing. The law firm of Davis Polk advised I Squared Capital on its equity investment in OCEC. The law firm of King & Spalding advised OCEC in the development of the engineering, procurement and construction contract for the project.