First Reserve buys 230-MW Mariah North Wind project in Texas

First Reserve, one of the largest global private equity and infrastructure investment firms exclusively focused on energy, on Feb. 11 announced a buy of the Mariah North Wind power project from Mariah Acquisition.

Upon completion by the end of 2016, Mariah North Wind is expected to generate 230 MW, serving the high-demand ERCOT market in Parmer County, Texas, with a 13-year, fixed price hedge for its power production. The project will also involve the construction and ownership of a 27-mile, 345-kV transmission line to interconnect with the ERCOT CREZ system. This is the first phase of an expected 600 MW development. The terms of the transaction were not disclosed.

The acquisition represents a continued expansion of First Reserve’s wind power portfolio, which is expected to generate a total of more than 1,100 gross MW upon completion of projects in the portfolio under construction. The acquisition also further geographically diversifies the firm’s wind power exposure, which now spans several states in the United States, as well as Mexico, Spain and Hungary.

Mariah Acquisition, an experienced wind development team backed by Houston-based Arctas Capital Group will continue to oversee project development and will partner with affiliate Harvest Energy Services to construct and operate the approximately $350 million facility. The developers will maintain a minority interest in the project during the operating period.

In addition, a turnkey engineering, procurement, and construction contract for the balance of the plant has been signed with Mortenson Construction as well as a fixed-price operations and maintenance services and turbine supply agreement with General Electric. Tax equity is being provided by MidAmerican Energy (backstopped by Berkshire Hathaway Energy), Citigroup and HSBC, with a sale lease-back with Hannon Armstrong for the transmission facilities and rights of way.

Mark Florian, Managing Director and Head of Infrastructure Funds for First Reserve, said: “We are pleased to be acquiring this construction-ready project backed by a strong, historically consistent wind resource. The Mariah North Wind opportunity represents an extension of the model followed by many of First Reserve’s energy infrastructure investments, in which we have partnered with what we view to be solid counterparties with contractual structures designed to protect returns on behalf of our Limited Partners.”

“Mariah North Wind will make a positive economic impact on the Parmer County community generating valuable tax revenue and employment opportunities,” said Mariah Acquisition Managing Director Michael Rucker. “Mariah Acquisition is proud to bring the project and its transmission line to financial close adding another source of clean power to the ERCOT grid, as the first of future wind and solar phases of the $1 billion Mariah Renewable Energy Center.”

First Reserve is one of the largest global private equity and infrastructure investment firms exclusively focused on energy. With over 30 years of industry insight, investment expertise and operational excellence, the firm has cultivated an enduring network of global relationships and raised approximately US31 billion of aggregate capital since inception.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.