Supporting a power plant that uses GE technology to deliver reliable, lower-emission energy while expanding its generation portfolio, GE Energy Financial Services - through GE Capital Markets, Inc. served as the lead arranger in a $97.4 million senior secured credit facility for Saguaro Power Company’s 105-megawatt combined cycle cogeneration project in Nevada.
Affiliates of NRG Energy (NYSE: NRG) and a partnership between MSD Capital, L.P. and Paragon Energy Holdings each maintain 50 percent ownership in the plant, located in Henderson. In addition to GE Energy Financial Services, CIT Corporate Finance, Energy participated in the credit facility as a lender and Documentation Agent. Additional financial details of the transaction were not disclosed.
A key advantage of the plant is its close proximity, 16 miles, from a major power load pocket, the world-famous Las Vegas Strip. Saguaro’s location minimizes transmission costs and constraints while supporting the growth of Las Vegas and surrounding areas. The plant has been in commercial operation since 1991.
The financing provides liquidity for working capital and general corporate purposes. Saguaro Power Company chose GE Energy Financial Services for its proven execution success, in-depth knowledge of inherent risks to qualifying cogeneration facilities, and its ability to lead and structure complex financing transactions. In addition to this financing, GE previously provided Saguaro with two robust, durable Frame 6B gas turbines, offering proven reliability, and one GE SAXC Steam Turbine, which provides high reliability and sustained high efficiency.
“This cogeneration project illustrates GE’s unique ability to provide both energy capital and technology,” said Carl Peterson, a managing director and Debt Origination leader at GE Energy Financial Services. “Our growth in power plant debt has also recently included loans for the 700-megawatt CPV Woodbridge Energy Center and 584-megawatt Nelson Energy Center.”
Commenting on behalf of the sponsors of the Saguaro Power Company, Brian Redmond, a managing director at Paragon Energy Holdings, stated,“The additional financing will provide us with the financial flexibility to continue operating a gas-fired co-generation plant that is integral to the operations of our steam customers and delivers electricity at a key location in NV Energy’s power grid.”
Mike Lorusso, Group Head of CIT Corporate Finance, Energy, added,“CIT is committed to financing cleaner and more efficient power generation projects and is pleased to serve as Documentation Agent for this transaction.”
Cogeneration, the simultaneous production of electricity and heat using a single fuel source such as natural gas, harnesses heat that would otherwise be wasted. This can result in higher thermal efficiency; also, carbon dioxide emissions can be substantially reduced. The Saguaro Power Company’s plant uses heat recovery steam generators to economically produce process-critical steam to adjacent chemical manufacturing and food processing plants.
The plant maintains a power purchase agreement to supply Nevada Power Co., a subsidiary of NV Energy Inc., with 90 megawatts of energy through April 2022. Separate contracts that also run through April 2022 are in place for the steam generated at the plant.
GE Energy Financial Services holds equity and debt investments in power projects with a combined capacity of 30 gigawatts, equivalent to the installed generating capacity of Norway. The GE unit offers flexible financial structures ranging from common and preferred equity to debt and acquisition finance.
About GE Energy Financial Services
GE Energy Financial Services (geenergyfinancialservices.com) GE’s energy investing business works as a builder, not just a banker, to help meet the world’s power and fuel needs. We offer more than money expertise for essential, long-lived and capital-intensive power, oil and gas infrastructure GE’s core business. Drawing on GE’s energy technical know-how, financial strength and risk management, we see value where others don’t and take on our customers’ toughest challenges with flexible equity and debt transaction structures. Based in Stamford, Connecticut, GE Energy Financial Services holds approximately $18 billion in assets.
GE (ge.com) works on things that matter. The best people and the best technologies taking on the toughest challenges. Finding solutions in energy, health and home, transportation and finance. Building, powering, moving and curing the world. Not just imagining. Doing. GE works.
NRG (nrgenergy.com) is leading a customer-driven change in the U.S. energy industry by delivering cleaner and smarter energy choices, while building on the strength of the nation’s largest and most diverse competitive power portfolio. A Fortune 500 company, we create value through reliable and efficient conventional generation while driving innovation in solar and renewable power, electric vehicle ecosystems, carbon capture technology and customer-centric energy solutions. Our retail electricity providers Reliant, Green Mountain Energy, Energy Plus and NRG Residential Solutions serve more than 2 million residential and commercial customers throughout the country.
About MSD Capital, L.P.
Founded in 1998, MSD Capital (msdcapital.com) is the private investment firm for Michael Dell and his family. The firm currently manages in excess of $13 billion in assets utilizing a multi-disciplinary investment strategy encompassing traditional private equity activities, real estate and investments in publicly-traded securities, in each case with the objective of building an investment portfolio focused on maximizing long-term capital appreciation. MSD Capital's team operates from the firm's offices in New York and Santa Monica.
About CIT Corporate Finance, Energy
CIT Corporate Finance, Energy (cit.com) provides value-added financing products and services to growth-oriented companies throughout the energy sector, including oil & gas and power. By combining extensive industry experience, structuring expertise and underwriting capacity, we create comprehensive solutions to our clients’ most critical strategic and funding needs. CIT Corporate Finance, Energy currently manages a large, diverse portfolio, which includes investments in all asset classes across the energy sector.
About Paragon Energy Holdings
Founded by a group of senior energy executives with expertise in the wholesale energy markets, Paragon owns and manages power and gas assets, and provides a wide range of buy-side and sell-side advisory services to energy sector stakeholders. Paragon has a proven track record in developing, financing, and optimizing energy assets. In addition, Paragon has an in-depth understanding of gas and power markets and asset valuation techniques that is supported by real-world experience in implementing restructuring strategies and asset-management solutions. In its advisory engagements, Paragon represents stakeholders and prospective investors in major energy financings, asset dispositions and restructurings. Paragon clients and partners include leading energy companies, Fortune 10 financial services companies, institutional investors, regulated utilities and private investment firms.