Energy Investors buys power plant from GIP, Fortistar

The energy-focused private equity firm has acquired an 865MW power plant in Texas from GIP and Fortistar for an undisclosed amount.

New York-based Energy Investors Funds (EIF) has acquired the Channelview cogeneration facility, an 865-megawatt (MW) gas-fired power plant outside Houston, from Global Infrastructure Partners and Fortistar, the private equity firm said in a statement.

The acquisition was made through EIF United States Power Fund IV, the firm’s latest and largest fund to date which closed in October 2011 on $1.71 billion. Financial details of the transaction were not disclosed.

Channelview, which began operating in 2002, sells steam and electricity under a long-term contract with “a large industrial customer,” whose name EIF did not disclose in the statement. The facility also sells power under a series of off-take agreements to the ERCOT market, the part of Texas whose electricity flow is managed by independent state operator, the Electric Reliability Council of Texas.

“We congratulate EIF on its purchase of Channelview, a state-of-the-art asset with market-leading efficiency that makes it both productive and environmentally friendly,” said Jonathan Bram, the GIP partner leading the transaction.

GIP, an independent fund manager with over $16.5 billion in assets under management, was the majority shareholder in Channelview. It acquired the plant in 2008 through an equity partnership with Fortistar, owner and manager of a network of power generation projects in the US and Canada.

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.

Photo courtesy of GIP.