Energy Investors Funds, a private equity fund manager that invests in the US energy and electric power sector, has committed to fund T G Power LLC’s development of the Hot Sulphur Springs
Energy Investors Funds, a private equity fund manager that invests in the US energy and electric power sector, has committed to fund T G Power LLC’s development of the Hot Sulphur Springs geothermal electric power plant near Elko, Nevada and will ultimately invest in the project itself. Terms of the transaction were not disclosed.
The project, which is expected to be operational by the end of 2009, is anticipated to generate 32 MW of baseload, renewable electricity, though the site has total net production output rated at 48 MW net.
The first phase of the project is being constructed on land leased from Ellison Ranching Company. Nevada Power Company, a wholly owned subsidiary of Sierra Pacific Resources (NYSE:SRP), has contracted with T G Power to purchase the full output of the Hot Sulphur Springs plant.
Andrew Schroeder, Senior Partner of Energy Investors Funds says, ‘The development of power plants fueled by renewable resources, such as geothermal energy, has become increasingly important and we expect to continue to see opportunity for investment in this space.’
‘The development of the Hot Sulphur Springs project represents the culmination of a lot of difficult work that has been put into the site over the last five years,’ says Martin Buckley, President of T G Power LLC. ‘Once the plant is constructed and begins commercial operations, it will provide important clean electricity to Nevada Power customers in an environmentally responsible manner. The project will produce enough power to serve the needs of over 30,000 homes.’
‘This agreement continues our commitment to increase the supply of renewable energy in Nevada,’ says Tom Fair, executive, renewable energy for Sierra Pacific Resources, ‘Nevada is number one in the country in geothermal energy per capita and increasing our renewable output is an important part of our balanced energy portfolio strategy.’
T G Power recently awarded the mandate for the construction funding and tax equity participation. DZ Bank and Fortis Capital are scheduled to provide construction financing for the project’s continued development and ultimate construction while Fortis Capital and J.P. Morgan Capital will provide the tax equity for the project.
Lags Exploration of Florida has performed the drilling for the production wells and injection wells necessary for obtaining the geothermal fluid production. JBR Environmental Consultants, Inc. of Elko, Nevada has provided environmental consulting services to acquire all the necessary permits and licensing agreements for all phases of the project.
The Nevada law firm of Jones Vargas has provided legal counsel on the permitting and licensing issues and Atlanta-based law firm Marshall & Lueder has led the negotiations for the power purchase agreement with Nevada Power and has also led the negotiations for various project construction and supply agreements.
