The Tennessee Valley Authority (TVA) on Jan. 17 completed a lease-purchase transaction that provides $1 billion in financing to support TVA’s vision of low-cost, cleaner energy by 2020.
TVA will lease the John Sevier combined cycle plant to John Sevier Combined Cycle Generation LLC, a limited liability company, for which it will receive $1 billion.TVA will complete the 880 MW natural gas-fired plant, and then lease it back over 30 years. The plant is scheduled to begin commercial operation in the summer of 2012.
"The use of lease-purchase financing gives us greater financial flexibility as we pursue a number of significant capital projects to realize our vision of providing cleaner energy,” Chief Financial Officer John Thomas said. “We will operate the plant for 30 years under this lease. And at the end of the term, the plant ownership will return to us.”
The financing for the lease purchase consists of a $100 million equity investment and a $900 million bond issue, both of which are secured by TVA’s rental payments.
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