EIF buys further 50% of New Jersey power plant

The energy-focused PE firm now holds 100% equity ownership in the Newark Energy Centre, having acquired an additional 50% from Hess Corporation.

Two funds managed by Energy Investors Funds (EIF), an energy and power-focused private equity firm, have indirectly acquired an additional 50 percent ownership stake in a 705-megawatt (MW) power plant, currently under construction in Newark, New Jersey from Hess Corporation, according to a statement.

Crédit Agricole, GE Energy Financial Services and Mitsubishi UFJ Financial Group provided a $590 million loan that EIF-NEC, an entity jointly owned by the two EIF-managed funds, will use to support the acquisition, construction and operation of the combined-cycle, natural gas-fired plant.

EIF did not disclose financial details of the transaction and declined to identify the two funds involved in the acquisition.

The Newark Energy Centre, which has been under construction for the past two years, is expected to begin commercial operations in May 2015. Its capacity, which will be enough to power 700,000 homes, will be sold to PJM, the regional transmission organisation that coordinates the movement of wholesale electricity in all or parts of 13 states and the District of Columbia.

According to the statement, the plant will operate as one of the cleanest gas-fired power plants in the US, with turbines that can start up quickly to produce power with reduced start-up emissions. GE, which is providing the turbines, will also service the equipment through a long-term contractual service agreement.

Power Plant Management Services is managing construction, NAES Corporation will be responsible for operations and maintenance, while Direct Energy will undertake additional energy management services.

Based in Stamford, Connecticut, GE Energy Financial Services is part of GE’s energy investing business. This transaction, according to Carl Peterson, a managing director and leader of debt origination at GE Energy Financial Services, is the sixth thermal debt investment his group has led in the last year.

Founded in 1987, EIF is one of the first private equity firms to focus on independent power and the electric utility sector. Since then it has raised more than $5 billion in capital and currently manages multiple private equity funds from its offices in Boston, New York, and San Francisco. EIF-managed funds own about 4,000MW of capacity in facilities that are currently operating or under construction and an additional 6,000MW in facilities that are in various stages of development.

The firm closed its fourth fund, EIF United States Power Fund IV, on $1.71 billion in October 2011.