Power generator ContourGlobal has completed the $180 million acquisition of the Vorotan Hydro Cascade, a hydroelectric facility comprising three individual power plants with a total capacity of 405 megawatts, the New York-based company said in a statement.
ContourGlobal will invest more than €50 million over the next six years to refurbish the plants has it acquired from the Armenian government in order to improve their operational performance, safety and efficiency.
The World Bank’s International Finance Corporation (IFC) will also be investing alongside ContourGlobal, having acquired a 20 percent interest in ContourGlobal Hydro Cascade, a subsidiary the power developer has set up through which it will finance the acquisition and refurbishment of the three plants located in southern Armenia. HSBC and Ameria Bank will also be providing acquisition financing ContourGlobal said but did not disclose the specific amount.
According to the statement, the acquisition represents the largest single US private investment in Armenia’s history and the first US investment in the country’s energy sector.
The facility accounts for approximately 15 percent of the installed capacity of Armenia’s electricity system and provides sufficient energy to power 250,000 homes. ContourGlobal will own and operate the facilities and will supply power to the Armenian grid under a long-term power purchase agreement, according to the statement.
“We are very pleased to announce the closing of the Vorotan transaction and that IFC will join us as an equity partner,” ContourGlobal co-founder, president and chief executive Joseph Brandt said. “We also are very pleased to build upon our nearly decade-long cooperation with the IFC investing together in development projects across the globe,” he added.
The acquisition will expand ContourGlobal’s renewable energy portfolio, which currently comprises approximately 1,000MW of hydro, wind, solar and biogas production in Latin America, Europe and Africa.
Founded in 2005 by Brandt and Reservoir Capital Group, a $7.3 billion New York-based investment fund, ContourGlobal is a developer and operator of electric power and district heating businesses. In addition to renewables, ContourGlobal also owns and operates conventionally-powered thermal power plants.