Cube Hydro buys four North Carolina plants

An affiliate of I Squared Capital’s hydroelectric investment vehicle has purchased facilities generating a combined 215MW, bringing the platform’s portfolio to 19 assets.

Cube Hydro Partners, a North American platform established by New York-based I Squared Capital, has acquired four hydropower power plants in North Carolina from Alcoa Power Generating.

Cube Hydro made the purchase through Cube Hydro Carolinas, a subsidiary. The four facilities, located along the Yadkin River and comprising the High Rock, Tuckertown, Narrows and Falls plants, generate a combined 215MW. Cube Hydro said that after upgrades, the plants will produce 800,000 MW/hours of clean energy per year.

“We are excited to expand our presence into North Carolina to operate and upgrade the plants on the Yadkin River,” Kristina Johnson, chief executive of Cube Hydro and former US undersecretary of energy, said in a statement. “We are committed to being good stewards of these well-run hydropower plants that have a long history of generating reliable, carbon-free electricity.”

Last October, Cube Hydro completed a $140 million private placement of 10-year senior secured notes. The investment grade notes are paying a 4.75 percent semi-annual coupon in April and October. Proceeds from the placement were used to retire some of Cube Hydro’s equity as well as to fund business requirements and strengthen its financial structure.

Cube Hydro began as a portfolio company of I Squared Capital in January 2014 to develop and operate small to mid-size hydroelectric plants, primarily in the US. After the Yadkin River plants and another pending acquisition closes, Cube Hydro will operate 19 plants generating a combined 373 MW throughout New York, Pennsylvania, Virginia and West Virginia.

Founded in 2012 by former executives of Morgan Stanley including Sadek Wahba, Gautam Bhandari and Adil Rahmathull, I Squared Capital targets energy, utilities and transport assets in the US, Europe and select high-growth markets. The firm closed its debut ISQ Global Infrastructure Fund on its $3 billion hard-cap in April last year.