First Reserve‘s Energy Infrastructure Fund is teaming up with Beowulf Energy to invest in power generation and midstream assets in the Eastern Caribbean. First Reserve is buying from Beowulf an equity stake in Trinity Power Limited, a power generation facility in the Republic of Trinidad and Tobago. Specific financial details of the deal were not released. First Reserve’s Energy Infrastructure Fund closed in April 2011 with $1.23 billion in committed capital.
First Reserve’s Energy Infrastructure Fund (“FREIF”) today announced it has partnered with Beowulf Energy (“Beowulf”) to invest in power generation and midstream assets in the Eastern Caribbean. The initial investment consists of the purchase from Beowulf of a substantial equity stake in Trinity Power Limited (“Trinity”), a 225 MW contracted natural gas fired power generation facility in the Republic of Trinidad and Tobago. Beowulf will maintain an ownership stake and continue to manage the Trinity facility.
In addition, FREIF and Beowulf are together acquiring a majority stake in the Eastern Caribbean Gas Pipeline Company (“ECGPC”), which is in planning stages for the construction of an undersea natural gas pipeline to supply natural gas from Tobago to other islands in the Eastern Caribbean. The pipeline is expected to significantly lower the cost of electricity in islands such as Barbados, where fuel oil is primarily relied upon for electricity generation. Upon financial close of the debt financing for the pipeline project, FREIF will have the option to become the majority owner of ECGPC.
“We are excited to partner with Beowulf, a leading power and energy developer, asset manager and investor,” said Mark Florian, Managing Director, First Reserve Corporation. “Trinity has historically performed very well and there is excellent visibility into long-term cash flows, given the contracts in place. The economic and environmental case for the pipeline is also very compelling, with the government and private sector participants aligned on the process to complete the project.”
“Trinity is an exceptional asset and ECGPC is a rare opportunity with tremendous potential,” Paul Prager, Founder and CEO of Beowulf, added. “The partnership we have formed with First Reserve, one of the world’s leading power and energy investment funds, is truly compelling to us, and we look forward to a prosperous long-term relationship.”
Trinity’s power purchase agreement (“PPA”) with the Trinidad and Tobago Electric Commission (“T&TEC”), is contracted through 2029, providing consistent long-term revenue. T&TEC’s obligations under the PPA, including supplying the natural gas to fuel the plant are backed by the Baa/A rated Government of Trinidad and Tobago.
ECGPC is a two phase project. The first phase consists of the construction of a subsea natural gas pipeline between Tobago and Barbados, and the second phase will extend the pipeline to other Eastern Caribbean Islands.
Full terms of the transaction were not disclosed. First Reserve’s Energy Infrastructure Fund closed in April 2011 with $1.23 billion in committed capital.
About First Reserve Corporation
With over $23 billion of raised capital since inception dedicated exclusively to the energy and natural resources industries, First Reserve is a premier private investment firm, making both private equity and infrastructure investments throughout the energy value chain. For 29 years, it has invested solely in the global energy industry, and has developed a preeminent franchise, utilizing its broad base of specialized energy industry knowledge as a competitive advantage. The firm is currently investing its most recent private equity fund, which closed in 2009 at approximately US $9 billion and its most recent infrastructure fund which closed in 2011 at approximately US $1.2 billion. First Reserve invests strategically across a range of energy industry sectors, backing talented management teams and building value by building companies.