UBS dives back into US with 785MW power plant stake

The firm’s second fund has become a shareholder in the project majority-owned by GIP’s Competitive Power Ventures.

UBS Asset Management’s second infrastructure fund has landed its fifth investment after it bought a 10.8 percent stake in a 785MW power plant in the US.

The UBS International Infrastructure Fund II, recently renamed as Archmore International Infrastructure Fund II, bought its share in the combined-cycle power generation facility from GE Energy Financial Services.

The GE unit retains its status as the plant’s second largest owner with a 24.5 percent stake. Some 51 percent of the site is owned by Competitive Power Ventures, a wind and gas developer owned by the $8.25 billion Global Infrastructure Partners II. US-based insurance firm Ullico holds a 13.7 percent shareholding.

The CPV Towantic project, based in Connecticut, remains under construction and is set to begin operations in June next year. It has a fixed capacity pricing for the first seven years of operations.

“This transaction provides us with access to a state-of-the-art energy facility with the capacity to provide ultra-efficient and reliable power to a significant market over the long term,” said Floyd Gent, head of infrastructure equity Americas at UBS. “The payment structure will deliver us with stable and attractive cash flows alongside our reputable new partners in this venture.”

The deal represents the fund’s second investment in the US after it joined forces with Harbert Management Corporation and Northwestern Mutual in November last year to acquire 13 thermal power plants with a capacity of 1.5GW from First Reserve. This investment was followed in May by the purchase of a Spanish toll road from Deutsche AM in May. The other deals in the fund comprise Southern Water in the UK and Axicom in Australia.