First Reserve, one of the largest global private equity and infrastructure investment firms exclusively focused on energy, today 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 and is 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 MW 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 backed by Arctas Capital Group, a Houston-based renewables boutique, will continue to oversee project development and will partner with affiliate Harvest Energy Services, Inc. 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 the plant has been signed with Mortenson Construction as well as a fixed-price operations and maintenance 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.
Mark Florian, Managing Director and Head of Infrastructure Funds for First Reserve, said, “We are pleased to be acquiring this construction-ready project backed by a strong, historically consistent wind resource. 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 counterparties 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.
First Reserve is one of the largest global private equity and infrastructure investment firms exclusively focused on energy. With over 30 years of industry expertise and commitment to operational excellence, the Firm has cultivated an enduring network of global relationships and raised approximately USD $31 billion of aggregate capital since inception. Putting these to work, First Reserve has completed more than 550 transactions (including platform investments and add-on acquisitions), creating several notable energy companies throughout the Firm’s history. Its portfolio companies operate on six continents, spanning the energy spectrum from upstream oil and gas to midstream and downstream, including resources, equipment and services and infrastructure. With this acquisition, it’s also making a strong statement of intent in the wind and solar, clean energy sectors.
