Fundraising

I Squared-backed Cube Hydro grows portfolio

The acquisition of another 10 run-of-the-river facilities comes about a month after Cube Hydro bought two hydro plants in upstate New York.

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Cube Hydro Partners, a portfolio company of New York-based fund manager I Squared Capital, has closed on its previously-announced acquisition of a 100 percent stake in 10 run-of-the-river hydro facilities, which add 83 megawatts (MW) of generation assets to its portfolio.

Cube Hydro acquired the 10 assets – located in Pennsylvania, Virginia and West Virginia – from Harbor Hydro, a portfolio company of LS Power Equity Advisors, for an undisclosed amount. In total, the facilities are expected to produce approximately 255 gigawatt-hours of electricity per year.

“We are pleased with our hydropower platform's expansion to a region characterised by dependable river basins, a highly efficient electricity market and a diverse off-taker base,” I Squared Managing Director Thomas Lefebvre said in a statement.

Neither seller nor buyer disclosed financial details of the deal, but according to a press release issued by LS Power in February 2014, LS Power had acquired 11 assets from FirstEnergy for approximately $395 million, 10 of which are now being sold to Cube Hydro.

The assets being acquired have a power purchase agreement for Renewable Energy Credits in place with a major utility and nine years remaining, a source told Infrastructure Investor.

Last month, Cube Hydro announced it was acquiring an 82.8 percent interest in Little Falls Hydro, a 13.6MW hydroelectric plant, and 100 percent ownership of Lyonsdale Hydro, a 3MW plant, both located in upstate New York.

I Squared established Cube Hydro, along with Enduring Hydro, in January 2014 as a joint venture focusing on investments in mid-sized greenfield and operating hydro projects in the US and Canada. I Squared's investment was made through the ISQ Global Infrastructure Fund, the debut vehicle the firm began raising in September 2013.

Last December, Infrastructure Investor reported that the investment manager had exceeded its original $2 billion target and is expected to conclude fundraising in early 2015.

Founded in 2012 by former executives of Morgan Stanley including Sadek Wahba, Gautam Bhandari and Adil Rahmathulla, I Squared Capital specialises in energy, utilities and transport in the US, Europe and select high-growth markets.