Calpine Corp. (NYSE:CPN) and GE Energy Financial Services, a unit of GE (NYSE:GE), obtained an $844.5 million credit facility to finance construction of the 619 MW combined-cycle Russell City Energy Center in Hayward, Calif.
The facility includes a construction loan that will convert to a 10-year term loan when commercial operations begin, expected in mid-2013. The construction loan and term loan facility will initially be priced at LIBOR plus 2.25 percent.
The loan facility – jointly arranged by MUFG Power & Utilities Group; ING Capital LLC; Lloyds Bank Corporate Markets; BMO Capital Markets and CoBank, ACB – is non-recourse to Calpine and GE Energy Financial Services.
Pacific Gas and Electric Co. (NYSE: PCG) will buy the full output of electricity from Russell City upon completion and will supply natural gas to the plant under a 10-year power purchase agreement. That PPA was approved by the California Public Utilities Commission in September 2010.
A unit of Calpine owns 75 percent of Russell City while a unit of GE Energy Financial Services owns the remainder.
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