Korean investors commit $400m to US power plant

A group of South Korean investors are investing both debt and equity in a New York project.

A group of South Korean investors have committed a total of $400 million of debt and equity to a gas-fired power plant project in the US, according to project developer Advanced Power.

The $1.6 billion Cricket Valley Energy Centre is a 1,100-megawatt natural gas-fired electric generation facility located in Dover, New York, which is scheduled for operation in 2020.

The facility is strategically located adjacent to the Iroquois natural gas pipeline and will sell energy, capacity, and ancillary services to the New York Independent System Operator (NYISO) to produce enough electricity for one million homes in the Hudson Valley.

“Cricket Valley Energy Centre will revitalise a dormant industrial site, create jobs, and generate tax revenue for the Town of Dover in Dutchess County and the State,” said Robert E. De Meyere, Cricket Valley Energy Centre’s project manager. “I am grateful to the Dover community for their continued support for this project. I look forward to bringing Cricket Valley Energy Centre to the operational phase.”

The Industrial Bank of Korea is providing $200 million of the $875 million worth of senior loans in the project. According to a local news report, the bank will receive an interest rate of 4.5 percent a year.

In addition, a group of South Korean investors will invest a combined $200 million for holdco debt and equity via the Kiwoom fund. Investors in the fund include Nonghyup Life Insurance Company, the National Agriculture Cooperative Federation and its brokerage and insurance arms, according to the developer.

Other lenders in the senior tranche include GE Energy Financial Services; BNP Paribas; Crédit Agricole Corporate and Investment Bank; Bank of America; Citi Bank; Industrial Bank of Korea; Shinhan Bank, New York branch; Industrial and Commercial Bank of China, New York branch; NongHyup Financial Group; National Australia Bank; Siemens Financial Services; and Sumitomo Mitsui Banking Corporation.

South Korea’s Samsung Life Insurance recently committed $250 million to a global infrastructure debt fund jointly launched by IFM Investors and Samsung Asset Management.

Owing to the lack of infrastructure investment opportunities in South Korea, it is expected that a lot of the countries’ domestic institutional investors will begin to expand and increase their exposure in overseas infrastructure.