From SNL, by Esther Whieldon
JCM Capital Ltd., a Toronto-based investment firm focused on renewable energy projects, has closed development financing for Lake Erie Power Corp.’s $1 billion underwater high-voltage, direct-current transmission line that would carry power from Ontario to PJM Interconnection LLC markets in Pennsylvania, JCM announced Sept. 23.
The privately funded Lake Erie CleanPower Connector project would run more than 60 miles from an HVDC converter station in Nanticoke, Ontario, to another converter station in Erie County, Pa. It would be capable of carrying up to 2,000 MW and is slated to be completed by the end of 2017.
The project involves installing two, six-inch diameter, solid-state HVDC cables beneath Lake Erie. The developer in a Sept. 12 news release said a low-impact water jet will be used to place the cables in a temporary trench “barely wider than the six-inch cable” after which the trench is “immediately filled. The technology isn’t new” in that there are a dozen similar projects installed in North America and more than 200 worldwide, says Lake Erie Power.
“The new intertie will let Canada transmit surplus clean energy generated by Ontario’s Green Energy Act to the PJM markets where there is demand,” JCM CFO Martin Ritchie said in a statement.
JCM is providing development capital “in the form of a share purchase to advance the project through the initial development tasks,” according to its website. “JCM may continue to provide later-stage development capital at its discretion, or will arrange such through its network of partners,” it said.
For construction financing, JCM, “with the assistance of the local developer, will arrange construction financing … through a large multi-national [engineering, procurement and construction] company. This arrangement includes full EPC services, project bonding and performance guarantees,” the website said.
Regarding debt financing, JCM will arrange “a debt facility … with a large international commercial lending institution,” the website said. For long-term equity financing, JCM will “run a process to identify potential long-term equity investors once the project nears the construction-ready stage.”
FERC on Sept. 16 authorized developers of the Lake Erie CleanPower Connector project to sell transmission rights to the line at negotiated rates. One of the project’s investors is Lake Erie Power CEO John Douglas. He was previously CEO of Ventus Energy, a wind energy developer active in Atlantic Canada that was acquired in 2007 by SUEZ Energy North America, a division of GDF Suez SA.
In 2007, Douglas also founded Riverbank Power Corp., a developer of run-of-river and pumped-storage hydropower projects in North and South America, according to a biography distributed by Lake Erie Power. The biography says Riverbank Power is being sold to a joint venture.
Riverbank Power in early 2012 announced it would develop pumped-storage facilities in North American under a joint venture with enXco Development Corp., which later changed its name to EDF Renewable Energy. EDF Renewable Energy was not immediately available to comment on whether it is buying Riverbank Power.
Douglas also co-founded Transmission Developers Inc., according to the biography. The Blackstone Group LP acquired Transmission Developers shortly before it announced in February 2010 it would develop the 1,000-MW Champlain Hudson Power Express project from the Canadian border to New York City. The line is projected to be in service in the fall of 2017.
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