CPV, GE, DGC secure largest US thermal power project financing in 2011 for 800 MW gas-fired power plant; 23 banks to provide nearly $800M in credit facilities
Competitive Power Ventures, Inc. (CPV); GE Energy Financial Services; and Diamond Generating Corporation (DGC), a wholly-owned subsidiary of Mitsubishi Corporation, co-owners of the planned $900-million CPV Sentinel power plant, have closed the largest project financing in the US thermal power industry this year for the facility to be built in Riverside County, Calif.
|GE’s LMS100 can reach full load in 10 minutes. Click to enlarge.|
The CPV Sentinel project is located near Desert Hot Springs, five miles northwest of Palm Springs. The partners announced that 23 banks—working with lead arrangers MUFG, Royal Bank of Scotland, ING, Natixis and Sumitomo Mitsui Banking Corp.—agreed to provide credit facilities of nearly $800 million for construction and other capital needs. With almost $2 billion of commitments received from lenders, interest in the project was so high that the syndicated loan was 2.4 times oversubscribed. Additional details of the financing were not disclosed.
With all permits finalized and the debt financing in place, Gemma Power Systems California, Inc. is scheduled to start construction of the 800-megawatt (MW) project immediately, with CPV Sentinel scheduled to go into commercial operation in the summer of 2013.
Complementing GE Energy Financial Services’ backing of the plant, GE Energy signed an agreement to supply eight gas-fired LMS100 turbine-generators capable of reaching full load in 10 minutes. CPV Sentinel will help prevent blackouts during extremely hot weather by providing peak power on demand. Given CPV Sentinel’s close proximity to 600 MW of wind farms, the project also will support California in meeting its goal of generating 33% of its power from renewable sources by 2020 by facilitating the integration of wind and solar power into the electric grid. California is requiring the largest addition of renewable generation of any US state. When the wind doesn’t blow or the sun doesn’t shine, CPV Sentinel can backstop the lost generation.
The aero-derivative LMS100 gas turbine-generators helped CPV Sentinel meet environmental challenges and assisted in reducing carbon dioxide emissions. At the CPV Sentinel plant, the turbines are designed to operate at 43% simple-cycle efficiency, nearly 10% better than the next most efficient simple-cycle plant in California today.
The CPV Sentinel project will supply power to the Coachella Valley and Los Angeles Basin under a long-term agreement with Southern California Edison, an Edison International company, which needs additional capacity for grid reliability and renewable integration. CPV will manage the project while DGC will serve as the plant operator.
CPV, the managing member and developer, owns 25% of the project, while DGC owns 50% and GE Energy Financial Services owns 25%.