ArcLight teams with GE, GIC on five natural gas-fired power plants in US Southeast

Source: ArcLight Capital Partners, LLC

ArcLight Capital Partners, LLC (ArcLight), GE Energy Financial Services, a unit of GE (NYSE:GE), and the Government of Singapore Investment Corporation Pte Ltd (GIC) announced they have agreed to become partners in five Georgia natural gas-fired power plants that together make up the largest fully independent power producer in the southeastern United States. The GE unit and GIC will each acquire 24.95 percent of the portfolio from an affiliate of ArcLight, now its sole owner. An affiliate of ArcLight will retain 50.10 percent.

Financial details of the transaction were not disclosed. The closing of the transaction remains subject to approval by the Federal Energy Regulatory Commission and Committee on Foreign Investment in the United States and is expected to occur toward the end of the first quarter of 2011. 

The plants, located throughout Georgia, comprise a combined cycle facility and four single-cycle peaking facilities, each of which is less than 10 years old. Together, they are capable of generating more than 2,500 megawatts of power, in several cases using GE gas-fired turbines. All five facilities, critical to the regional power supply and grid stability, are contracted under long-term agreements to investment-grade counterparties and are managed by Consolidated Asset Management Services, an ArcLight affiliate. 

The portfolio comprises:
• Monroe – a 320-megawatt plant in Monroe, 50 miles east of Atlanta 

• Walton – a 450-megawatt plant in Monroe, adjacent to the Monroe plant
• Washington – a 602-megawatt plant in Linton, 50 miles east of Macon
• Sandersville – a 640-megawatt plant in Sandersville, seven miles from the Washington plant 

• Effingham – a 515-megawatt plant in Rincon, 20 miles north of Savannah

The portfolio is well positioned to benefit from the macroeconomic recovery and more stringent energy and carbon legislation as well as the boom in production of unconventional natural gas in the United States. In addition, the portfolio will support additional infrastructure investment in the region to meet the demand for power and accommodate the power supply reconfiguration expected to unfold over the next decade. 

"Since the initial investment in this portfolio in 2007, ArcLight and CAMS have developed a strong track record of operational success and commercial reliability in a promising regional market," said Dan Revers, Managing Partner of ArcLight. "We are excited about the opportunity to partner with these two highly respected and valued-added investors, and we look forward to working closely with GE and GIC to maximize value across the portfolio and platform." 

ArcLight has completed several transactions with GE Energy Financial Services, including the GE unit's lead lending of $98 million in senior secured credit facilities for the Sandersville power plant. 

"This transaction enables us to deepen our relationship with ArcLight, establish ties with an important new partner, GIC, and work together on an attractive set of assets in a core focus area, thermal power generation," said Kevin Walsh, managing director and leader of Power and Renewables at GE Energy Financial Services. 

"This is an attractive portfolio of contracted power generation facilities in a region experiencing an increasing demand for low carbon, efficient power. The completion of this transaction complements our growing portfolio of infrastructure investments in the US. We are delighted to have ArcLight and GE, who have extensive experience in owning and operating similar assets, as our partners in this deal," said Mr. Ang Eng Seng, Global Head of GIC's Infrastructure Group.

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