Tenaska obtains $780 million in financing for 925-million natural gas merchant plant
Written By: Stratton Report
April 19, 2016
On April 19, Tenaska announced it had closed approximately $780 million in financing for the Tenaska Westmoreland Generating Station, a 925-MW natural gas-fueled power plant project near Pittsburgh. MUFG Union Bank, N.A., BNP Paribas, Citigroup Global Markets, and Industrial and Commercial Bank of China, Limited led the bank group for the financing.
The Tenaska Westmoreland project is owned by Tenaska Pennsylvania Partners, LLC, which is comprised of affiliates of Tenaska and Diamond Generating Corporation (DGC), a subsidiary of Tokyo-based Mitsubishi Corporation.
According to the firm, during its history Tenaska has raised approximately $14.4 billion in capital through bank facilities, capital market transactions, corporate facilities and equity, supporting the successful development of approximately 10,000 MW of natural gas-fueled and renewable power projects. The company has approximately 2,500 MW in pre-financing development.
Dave Kirkwood, vice president and treasurer observed: “Tenaska has a reputation for strong power projects that meet the needs of an evolving industry. We have the expertise to advance projects from concept into operation, and we have long-standing relationships with financial institutions to support that.”
Kirkwood added that the forward capacity market in PJM Interconnection, which Tenaska Westmoreland will serve, and five-year revenue hedging were also key to the success of the financing. PJM coordinates the delivery of power in all or parts of 13 eastern states and the District of Columbia.
Diamond CEO Satoshi Hamada remarked:
“DGC is pleased to be part of this important project in Pennsylvania and is committed to providing reliable, clean electricity for the region. The project represents a significant investment alongside a valued partner.”
The relationship with Tenaska includes investments in natural gas-fueled power generating facilities in Alabama, Georgia and Texas.
Greg Kelly, president of Tenaska’s Development Group noted: “Achieving financial closing for Tenaska Westmoreland illustrates our ability to develop and advance market-driven power projects. We are pleased to reach this milestone and look forward to the next phase of the project.”
Construction began earlier this year, with commercial operation targeted for 2018. Black & Veatch is the engineering, procurement and construction (EPC) contractor for the project.
Nick Borman, Tenaska senior vice president of engineering and construction pointed out: “Black & Veatch’s experience in power plant and infrastructure construction, combined with Tenaska’s record of success in power plant development and operation, will help ensure that Tenaska Westmoreland is a safe, efficient and reliable power plant. Black & Veatch is leveraging its global knowledge and experience in delivering another advanced combined-cycle project,” said Steve Edwards, chairman and CEO of Black & Veatch. “We are focused on optimizing the schedule and execution on the project to support Tenaska in safely delivering its customers clean, efficient and reliable energy supplies.”