Equity Consortium Closes Acquisition of Stakes in New York’s Astoria Energy Facilities

Source Press Release
Company Harbert Management CorporationAPG Groep NVMunich Re 
Tags Asset Deals, Deals, Power
Date July 01, 2020

Harbert Power Fund III, LLC (“HPF II”), Harbert Power Fund V, LLC (“HPF V”) and NM Harbert Astoria LLC (“Harbert Astoria”) are pleased to announce their participation in the sale of 100% of the holdings in Astoria Power Partners LLC (“APP”) and approximately 55% of the holdings in Astoria Power Partners II LLC (“APP II” together, the “Platform”) to a newly formed holding company, Astoria Power Partners Holding, LLC (“APPH”).

The selling owners of APP include ENGIE, Mitsui & Co, Harbert Power Fund III, LLC, Harbert Power Fund V, LLC, JEMB Family L.P., and funds managed by Ares EIF Management, LLC, and selling owners in APP II include ENGIE, Harbert Power Fund III, LLC, JEMB Family L.P., NM Harbert Astoria LLC, and TIAA.

APPH, the buyer, is comprised of a consortium of equity investors including APG, MEAG (Munich Re’s asset manager acting for investors from within Munich Re Group), Clal Insurance Company, and other US institutional investors.

APP wholly-owns Astoria Energy LLC, which owns and operates a 615 MW dual-fuel combined cycle generating facility located in Astoria, Queens, NY (“Astoria Energy”). Astoria Energy sells all of its output on a merchant basis into the New York Independent System Operator administered wholesale power market.

APP II wholly-owns Astoria Energy II LLC, which owns and operates a 615 MW dual-fuel combined cycle generating facility adjacent to Astoria Energy (“Astoria Energy II”). Astoria Energy II sells all of its output bilaterally to the New York Power Authority under a long-term power purchase agreement.

Astoria Energy and Astoria Energy II, clean state-of-the-art generating facilities with a remarkable operating track record, serve to simultaneously improve air quality, reduce wholesale power prices, and improve electric system reliability for consumers in New York City.

“The sale of ENGIE’s interest in Astoria Energy and Astoria Energy II is a step in our transition in the US from merchant generator to an ‘energy as a service’ solution provider” said Gwenaelle Avice-Huet, Executive Vice President of ENGIE and CEO of  ENGIE North America.

“As an original developer, and the longest-participating partner in Astoria Energy, JEMB Family has been pleased to provide reliable electricity for many years to New York City, its corporate home. We congratulate the management team for such incredible professionalism and leadership, and wish the new owners well,” said Morris Bailey, head of JEMB.

Steven Hason, Head of Americas Real Assets at APG said, “As a pension investor, we are continuously looking for attractive infrastructure investments that help us realize stable and long-term returns for our pension clients. This transaction represents an opportunity to invest in facilities that provide reliable baseload electricity to New York City and will provide system stability through New York’s energy transition.

We look forward to working with our partners who share our long-term investment goals with regard to this critical infrastructure asset.”

Holger Kerzel, Member of the Board of Management at MEAG, stated, “We are keen to invest in the United States, given the large US share of Munich Re’s insurance portfolio. Electricity supply for New York City is an attractive investment opportunity for Munich Re, given the moderate risks and stable and sustainable returns. The high level of long-term income stability will cover the liabilities in the insurance business of our clients. We are pleased to have teamed up with professional partners in this investment project to form a successful long-term relationship.”

Yossi Dory, Clal’s Chief Investment Officer, said, “We are proud to invest alongside reputable investors such as APG and MEAG in long-term, high-quality assets with a proven track record and excellent performance. The Astoria projects, which are the backbone of the New York City electric power system, will create long-term, sustainable returns for our pension, provident, and insurance members.”

Charles McCall, CEO of APP and APP II, stated “This is a remarkable transaction and marks a fantastic transition for our companies. With the coordinated sale of the Platform, our selling shareholders realized fair value for their interests and our new ownership group was able to establish a meaningful foothold in arguably the most attractive privately held infrastructure in the US power space. Working in close concert with our advisors and project counsel, our management team is proud to have helped deliver this result.”

The sellers were represented by Morgan Stanley and PJ Solomon, serving as financial advisors, and Morgan, Lewis & Bockius LLP as legal counsel. Holland & Knight and Sidley Austin LLP acted as legal counsel to APPH.

Source: EvaluateEnergy® ©2020 EvaluateEnergy Ltd