First Reserve, one of the largest global private equity and infrastructure investment firms exclusively focused on energy, announced the acquisition of the Mariah North Wind power project from Mariah Acquisition.
Upon completion, Mariah North Wind is expected to generate 230 MW of wind power, serving the high-demand ERCOT market in Parmer County, Texas, with a 13-year fixed price hedge for its power production.
The project will also construct and own a 27-mile, 345-kV transmission line to interconnect with the ERCOT CREZ system. It’s the first phase of an expected 600 MW development. The terms of the transaction were not disclosed.
The acquisition represents a continued expansion of First Reserve’s wind-power portfolio, which is expected to generate a total of more than 1,100 gross-megawatts upon completion of projects in the portfolio under construction. The acquisition also further geographically diversifies the firm’s wind-power exposure, which now spans several states in the United States, as well as Mexico, Spain, and Hungary.
Mariah Acquisition, an experienced wind-development team is backed by Arctas Capital Group, a Houston-based renewables boutique, and will continue to oversee project development. It will also partner with affiliate Harvest Energy Services to construct and operate the approximately $350 million facility.
The developers will maintain a minority interest in the project during the operating period. In addition, a turnkey engineering, procurement, and construction contract for the balance-of-plant has been signed with Mortenson Construction, along with a fixed-price O&M services and turbine supply agreement with General Electric.
Tax equity is being provided by MidAmerican Energy (backstopped by Berkshire Hathaway Energy), Citigroup, and HSBC, with a sale lease-back with Hannon Armstrong for the transmission facilities and rights of way.
“We are pleased to be acquiring this construction-ready project backed by a strong, historically consistent wind resource,” said Mark Florian, Managing Director and Head of Infrastructure Funds for First Reserve. “The Mariah North Wind opportunity represents an extension of the model followed by many of First Reserve’s energy infrastructure investments in which we have partnered with what we view to be solid counter-parties with contractual structures designed to protect returns on behalf of our Limited Partners.”
“Mariah North Wind will make a positive economic impact on the Parmer County community, generating valuable tax revenue and employment opportunities,” said Mariah Acquisition Managing Director Michael Rucker. “Mariah Acquisition is proud to bring the project and its transmission line to financial close adding another source of clean power to the ERCOT grid, as the first of future wind and solar phases of the $1 billion Mariah Renewable Energy Center.”
The project is expected to be operational by the end of 2016.
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