Washington DC-headquartered The Carlyle Group is set to acquire a 100 percent stake in the Rhode Island State Energy Centre (RISEC) from subsidiaries of electricity company Entergy, bringing the total number of power plants in its power generation portfolio to 18.
Equity capital for the $490 million transaction will come from Carlyle Power Partners II (CPP II) and its precursor Carlyle Power Opportunities Capital Partners. The acquisition is being done in conjunction with Cogentrix Energy Power Management, an independent power producer Carlyle acquired from Goldman Sachs in December 2012.
In operation since 2002, the 583-megawatt (MW) power plant, located in Johnston, Rhode Island, participates in New England’s deregulated wholesale power market.
“RISEC is among the most efficient combined cycle facilities in New England and is well positioned to capitalise on strong regional market dynamics,” Carlyle managing director and co-head of Carlyle Power Partners said in a statement. “Additionally, the retirement of aging generation in the region is putting a greater emphasis on efficient gas-fired generators, like RISEC, to meet everyday electricity demand.”
The transaction marks the second investment Carlyle is making through CPP II, a fund the firm launched in June 2014 to invest in the North American power sector. As of August 14, 2015, Carlyle had raised $839.3 million for CPP II, according to a filing with the Securities and Exchange Commission. The amount Carlyle is targeting for this fund has not been disclosed. However, one source told Infrastructure Investor that CPP II has not reached final close.
The firm did not respond to a request for comment.
Last December, it used the fund as well as Carlyle Power Opportunities Capital Partners LP to fund the acquisition of a 75.05 percent stake in Southeast PowerGen, a portfolio of six natural gas-fired power plants in the state of Georgia, from ArcLight Capital Partners and Singapore sovereign wealth fund GIC.
In addition to the power sector, Carlyle invests in private equity, infrastructure, real estate and other asset classes. As of June 30, it had $193 billion of assets under management across 128 funds and 159 fund of funds vehicles.