Tenaska closes $780 M financing for natural gas-fueled power plant in Pennsylvania

Independent energy provider Tenaska closed approximately $780 million in commercial financing for the 925 MW natural gas-fueled power plant Tenaska Westmoreland Generating Station.

Since its founding in 1987, Tenaska has raised approximately $14.4 billion in capital through bank facilities, capital market transactions, corporate facilities and equity, supporting the successful development of approximately 10,000 MW of natural gas-fueled and renewable power projects. The company has approximately 2,500 MW in pre-financing development.

We published yesterday that Mitsubishi Corporation (MC) recently reached an agreement with Tenaska, to develop, own and operate a natural gas-fired power generation project in Pennsylvania in the USA. Working through its 100% subsidiary Diamond Generating Corporation (DGC), MC will hold a 50% equity share in the project while Tenaska will hold the remaining 50%.

Dave Kirkwood, vice president and treasurer, said: 

“Tenaska has a reputation for strong power projects that meet the needs of an evolving industry. We have the expertise to advance projects from concept into operation, and we have long-standing relationships with financial institutions to support that.”

MUFG Union Bank, N.A., BNP Paribas, Citigroup Global Markets, and Industrial and Commercial Bank of China, Limited led the bank group for the financing.

Kirkwood added that the forward capacity market in PJM Interconnection, which Tenaska Westmoreland will serve, and five-year revenue hedging were also key to the success of the financing. PJM coordinates the delivery of power in all or parts of 13 eastern states and the District of Columbia.

The Tenaska Westmoreland project is owned by Tenaska Pennsylvania Partners, LLC, which is comprised of affiliates of Tenaska and Diamond Generating Corporation (DGC), a subsidiary of Tokyo-based Mitsubishi Corporation.

CEO Satoshi Hamada said: 

“DGC is pleased to be part of this important project in Pennsylvania and is committed to providing reliable, clean electricity for the region. The project represents a significant investment alongside a valued partner.”

The relationship with Tenaska includes investments in natural gas-fueled power generating facilities in Alabama, Georgia and Texas.

Greg Kelly, president of Tenaska’s Development Group, said: 

“Achieving financial closing for Tenaska Westmoreland illustrates our ability to develop and advance market-driven power projects. We are pleased to reach this milestone and look forward to the next phase of the project.”

Construction began earlier this year, with commercial operation targeted for 2018. Black & Veatch is the engineering, procurement and construction (EPC) contractor for the project.

“Black & Veatch’s experience in power plant and infrastructure construction, combined with Tenaska’s record of success in power plant development and operation, will help ensure that Tenaska Westmoreland is a safe, efficient and reliable power plant,” said Nick Borman, Tenaska senior vice president of engineering and construction.

Mitsubishi Hitachi Power Systems will provide the two natural gas turbines for Tenaska Westmoreland.