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Energy Investors Funds sells Tierra Energy’s wind assets to Duke Energy

New York-based Energy Investors Funds, a private equity fund manager that invests in the energy and electric power sector, has announced that its United States Power Fund II has sold the w

New York-based Energy Investors Funds, a private equity fund manager that invests in the energy and electric power sector, has announced that its United States Power Fund II has sold the wind development assets of Tierra Energy, an Austin, Texas-based developer of natural gas-fired generation facilities and wind farms, to Duke Energy.

Included in the transaction, the price of which was not disclosed, is more than 1,000 megawatts of wind projects under development in the western and south-western states of the US.

USPF II acquired a majority interest in Tierra in November 2005. Three of the wind development projects acquired by Duke Energy, totalling approximately 240 MW, are located in Texas and Wyoming, and are expected to enter operation by the end of 2008, with additional facilities in the two states potentially coming on stream the following year.

‘Tierra Energy is a premier developer of wind power generation projects and we are thrilled to have invested with them,’ says Terence Darby, the Energy Investors Funds managing partner who led the deal team with vice-president Keith Derman.

‘This partial exit allows EIF to return some capital to our investors while maintaining a stake in an excellent company going forward.’ Following the sale, Tierra Energy will continue to own and develop a portfolio of natural gas-fired generation facilities in various markets.

‘This has been a terrific investment for USPF II, EIF and its investors,’ says John Buehler, another EIF managing partner. ‘Over its history, Energy Investors Funds has generated excellent, risk-adjusted returns and the partial sale of our stake in Tierra Energy is the latest example of our ability to realise value for our investors.’

Energy Investors Funds was founded in 1987 as the first private equity fund manager dedicated exclusively to the independent power and electric utility industry. Its investment strategy is to create geographically and technologically diversified portfolios of electric power-related assets that provide superior risk-adjusted equity returns with current cash flow and capital appreciation.

As investment managers, Energy Investors Funds seeks to mitigate commodity risk in fuel and electricity by focusing primarily on acquiring power assets with long-term off-take contracts.

Energy Investors Funds has mobilized over USD2.5bn in capital, and currently manages six private equity funds from its offices in Boston, New York and San Francisco that have made more than 90 investments with a combined underlying asset value exceeding USD5bn.

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