Argan subsidiary Gemma Power Systems (GPS) has entered into a consent and intercreditor agreement in connection with the construction and design of an 820 MW gas fired power plant in Pennsylvania, which is being planned by a Moxie Energy subsidiary.
An intercreditor agreement is an agreement between one or more creditors who have shared interests in a particular borrower.
Earlier this year, the Pennsylvania Department of Environmental Protection issued an air permit for a new combined-cycle natural gas plant in Lycoming County, Pa. Another Moxie subsidiary has also gained state approval for the Liberty combined-cycle gas plant in Bradford County, Pa.
GPS has been funding Moxie Patriot LLC in the development of this power plant project and has advanced approximately $3.7m in working capital to the project, Gemma said in a May 6 statement.
Days earlier, Gemma announced that it had entered into a similar agreement with Moxie Liberty LLC.
On May 3, Moxie Patriot entered into a membership interests purchase agreement with a third party investor who will provide advances of certain pre-construction costs. The consummation of the purchase of Moxie Patriot is contingent upon the third party investor securing permanent financing for the project.
Should the third party investor consummate the Moxie Patriot purchase, GPS would build and design the power plant under an engineering, procurement and construction (EPC) agreement. GPS would receive development success fees and repayment of the working capital advances plus accrued interest from the proceeds of the sale of Moxie Patriot.
Argan’s primary business is designing and building energy plants through its Gemma Power Systems subsidiary. According to the Gemma website, the company has over 10,000 MW of generating capacity installed and under contract on an EPC basis.