Energy Investors Funds (EIF), an energy-focused private equity firm, announced that two EIF-managed funds have indirectly acquired an additional 50% stake in the Newark Energy Center from Hess Corporation, a large American-based integrated oil company headquartered in New York City.
The EIF-managed funds used a US$590 million loan from Crédit Agricole, GE Energy Financial Services and Mitsubishi UFJ Financial Group. With the acquisition, EIF-NEC, a joint venture owned by two EIF funds, now holds 100% of the equity in the Newark Energy Center.
The Newark Energy Center (NEC) is an environmentally advanced, 655MW gas-fired electricity generating facility. The project sits on 23 acres of brownfield industrial land in New Jersey, an optimal location with nearby gas supply and electrical interconnection point. The project has been under construction for nearly two years and is expected to begin commercial operations in May 2015. It will sell its energy and capacity into the PJM capacity market. Power Plant Management Services is managing construction, with NAES Corporation providing operations and maintenance and Direct Energy undertaking additional energy management services.
Keith Derman, a partner at EIF, stated:
We are excited to consolidate our ownership of the Newark Energy Center and are pleased to work with three longtime relationship banks on the financing of such a critical new generation resource. This project will provide the PJM market with a reliable new source of efficient and environmentally friendly capacity.
The Newark Energy Center will operate as one of the cleanest gas-fired power plants in the United States, using two GE 7F.05 Gas Turbines and one GE D400 Steam Turbine, and features advanced emissions control technology. The 7F.05 Gas Turbine can start up quickly to produce power with reduced start-up emissions, helping to enable the integration of renewable energy.