Capital Power Corporation and Manulife Investment Management have teamed up to buy a 1.63GW natural gas combined-cycle cogeneration facility in the US from OMERS Infrastructure.
Capital Power and the Manulife Infrastructure Fund II fund have agreed to buy MCV Holding from OMERS Infrastructure and its co-investors for $894m (€885m), including the assumption of $521m of project-level debt.
TSX-listed North American wholesale power producer Capital Power and Manulife will each contribute $186m towards the acquisition for equal stakes.
MCV Holding owns Midland Cogeneration Venture (MCV), the largest natural gas-fired cogeneration facility in the US. The facility is located in Midland, Michigan.
OMERS initially acquired a 100% interest in MCV in 2012 and in 2013, sold a minority stake to third-party investors in the Global Strategic Investment Alliance investment programme.
Brian Vaasjo, president and CEO of Capital Power, said the transaction provides immediate adjusted funds from operations accretion and is supported by highly contracted cash flows to 2030 and 2035 from long-standing counterparties.
“Located in Michigan, it is the largest gas-fired cogeneration facility in the United States and combined with its excellent reliability history and operating flexibility, Midland Cogen is a critical asset to support grid reliability during the transition to renewables and is extremely well-positioned for re-contracting beyond 2030.”
Scott Kushner, managing director of infrastructure investments at Manulife Investment Management, said: “As the electric grid continues to further integrate renewable assets, Midland Cogen serves as a flexible, responsive and stable asset that is critical to serving electricity customers in Michigan.
“We are pleased to bring this type of investment to our clients as part of their diversified infrastructure portfolio.”
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