Carlyle sells hydro assets to mid-market specialist

The private equity firm shed the hydro assets it bought in a deal last year that also included gas and petroleum-fired power plants.

The Carlyle Group has sold five hydroelectric facilities in New England it acquired last year to mid-market power specialist Hull Street Energy.

Hull Street Energy, based in Maryland, purchased full ownership in Nautilus Hydro, an 18MW portfolio located in Massachusetts along the Chicopee and Deerfield rivers. Terms of the deal were not disclosed.

Carlyle purchased the facilities last June from IFM Investors as part of a 1.8GW portfolio then called Essential Power that also included gas and petroleum-fired plants. Cogentrix, Carlyle’s power asset management platform bought from Goldman Sachs in 2012, has operated the hydro facilities. Carlyle’s power portfolio has a total net generation of around 6GW throughout the US.

Carlyle declined to comment for this story.

The Washington, DC-based private equity firm has been on the fundraising trail for a couple energy and infrastructure vehicles. In November, it closed on $2.8 billion the Carlyle Energy Mezzanine Opportunities Fund II. Carlyle is also currently raising its $2.5 billion Global Infrastructure Opportunity Fund.

Hull Street said the deal is part of its strategy to build out its presence in the North American power sector. The firm now has a combined 465MW of assets in Massachusetts, Connecticut, Rhode Island, New Jersey and Montana. It operates out of its subsidiary Milepost Power Holdings, which in April purchased Maxim Power and its portfolio of five natural gas plants for $106 million.

Hydro assets in the US are experiencing “a renaissance” due to their insulation from power price swings and increasing demand for clean energy, according to ratings agency Standard & Poor’s. The report said that, due to high capital costs, a wave of new builds is unlikely, but existing assets “retain significant value”.