Panda Power Funds said Sept. 18 that affiliate Panda Sherman Power LLC has successfully completed the financing on its 758-MW, natural gas-fueled, combined-cycle power project in Sherman, Texas.
The company will immediately start construction and expects commercial operations to begin by the end of 2014. The Sherman plant will utilize state-of-the-art combustion turbine and emissions-control technology, making it one of the cleanest, most efficient natural gas-fueled power plants in the U.S., the company noted.
Panda Power Funds selected a turn-key consortium of Bechtel and Siemens Energy to build the generation facility. The firms are two of the largest power contractors and technology providers in the world. As a part of the contract, Siemens will provide the power island package including the natural gas turbines, steam turbine, waste heat recovery boilers, and instrument and control systems. Bechtel will be responsible for the engineering and procurement for the balance of the plant, and the installation, construction and commissioning of the facility.
Goldman Sachs and Credit Suisse arranged the senior debt financing for the plant. Ares Capital was the documentation agent. The transaction marks only the second time in six years that a capital-intensive, greenfield construction project has been financed with a term loan, Panda noted. The other financing was for Panda’s 758-MW Temple, Texas, generating station which occurred in July of this year. Panda Power Funds is supplying equity for the Sherman project along with several other institutional co-investors.
“The financing market that was tough as nails two months ago is starting to show signs of movement in our direction,” said Todd Carter, president and senior partner of Panda Power Funds. “While it was still a long, hard march to closing, calls were coming in to us from many different quarters to be a part of this project.”
The Panda Sherman project has been strategically sited in an area that will serve one of the fastest growing regions of the U.S. According to census data, eight of the 15 fastest growing cities in the U.S. are located in Texas. Of these cities, five are located in North Texas. Sherman, Texas, Mayor Bill Magers said the generating facility will provide the power necessary to locate future commercial enterprises in the North Texas region.
According to a study conducted by Impact Data Source of Austin, Texas, the plant will contribute an estimated $1.7bn to the area’s economy during construction and its first 10 years of operation. Approximately 700-800 jobs will be created to construct the Sherman power plant at peak construction. During operations, the generating station will create an estimated 27 skilled jobs to operate the facility and 45 indirect jobs within the community to support the plant.
The plant will be located at Progress Industrial Park 3 in South Sherman. When completed, it will be able to supply the power needs of approximately 750,000 homes in the North Texas area.
Founded in 2010, Panda Power Funds is a private equity firm located in Dallas, Texas, which has the ability to internally source and develop, acquire, invest in, and operate large-scale, natural gas-fueled power generation facilities. The company recently built a utility-scale, 20-MW solar farm in Pilesgrove, N.J. — one of the largest solar farms in the northeast U.S.