Energy Investors Funds and Starwood Capital Group to finance Neptune undersea transmission cable

NEW YORK, July 21, 2005 — Energy Investors Funds, on behalf of United States Power Fund, L.P. and United States Power Fund II, L.P., and Starwood Energy Investors LLC, an affiliate of Starwood Capital Group Global LLC, both established private equity fund managers, announced that they had closed a $73 million and $24 million equity investment, respectively, to finance the construction and operation of the Neptune Regional Transmission System, a 65-mile, 660 MW undersea High Voltage Direct Current transmission cable connecting Long Island with New Jersey.

“Power constrained markets across the country are seeking energy solutions similar to the one offered here by the Neptune project,” said Andrew Schroeder, Partner with Energy Investors Funds. “We were also investors in the Path 15 transmission line upgrade, which is an 84-mile electricity transmission line that will provide up to 1,500 megawatts of capacity to northern California. These kinds of projects benefit not only our investors, but the residents in those markets who have increased access to more power at a competitive price.”

The cable will begin at a Neptune-owned and built converter station in Sayreville, NJ and will be buried along the entire route with 51-miles of it running underneath the Raritan River, the Raritan Bay, and the Atlantic Ocean. The cable will make landfall again in Long Island at Jones Beach and follow along the Wantagh State Parkway to the final converter station located in North Hempstead, NY. Neptune has a 20-year firm transmission capacity purchase agreement contract with the Long Island Power Authority, which was announced in September 2004. “The Neptune project will provide Long Island with long term access to a diverse and competitively priced energy supply and Starwood Capital is pleased to be a part of it,” said Barry Sternlicht, Founder, Chairman and CEO of Starwood Capital Group.

“Energy Investors Funds seeks out opportunities across the electric transmission and power generation spectrum, ranging from development stage to operating assets,” said Herb Magid, Energy Investors Funds Managing Partner. “In April 2004, we became part of the consortium of investors financing the Astoria Energy project, which is building the first new generation project in the New York City market in 25 years. We believe supporting development projects like those we’ve been involved in is vital to the future health and viability of the antiquated and overburdened US power market.”

About Energy Investors Funds [ www.eifgroup.com ]

Energy Investors Funds is 100% management owned and was founded in 1987 as the first investment manager to raise, close, invest, recapitalize, and liquidate the assets of a private equity power fund, and is the only private equity power fund manager with an established track record of long-term success.

Energy Investors Funds has mobilized over $1.5 billion in capital, and currently manages five private equity funds from its offices in Boston, New York, and San Francisco. These funds have made over 65 diversified investments, with a combined underlying asset value exceeding $5 billion.

The United States Power Fund, L.P., which closed in December 2003, raised total commitments of $250 million from endowments and foundations, pension plans, fund-of-funds, high net worth individuals, banks and insurance companies, and utilities. The Fund principally targets investments in generation, transmission and energy service assets in the U.S. The United States Power Fund II, L.P., which had its first closing in June 2005, has commitments from the same network of investors and is pursuing a similar investment strategy. Each of these funds are managed by Energy Investors Funds and will invest in the Neptune project.

About Starwood Energy Investors LLC [ www.starwoodcapital.com ]

Starwood Energy Investors is the first of a series of investment vehicles to be established by Starwood Capital Group Global (“Starwood Capital”) for the express purpose of making energy-related investments. The Neptune Regional Transmission System represents the first such investment. Starwood Capital seeks to leverage existing investment capabilities into the energy space and has hired dedicated energy professionals to pursue further opportunities.

Starwood Capital is a privately held global investment management firm based in Greenwich, Connecticut that has historically specialized in real estate-related investments. Since inception in 1991, Starwood Capital and its predecessors have completed over 300 transactions in which Starwood Capital and its affiliates have invested approximately $3.0 billion of equity capital in transactions representing approximately $9.0 billion worth of real estate and related assets. Starwood Capital and its affiliates have successfully executed an investment strategy that includes building business enterprises around core investment portfolios, including: (a) the recapitalization, reorganization and expansion in 1995 of a real estate investment trust in financial difficulty to become the company that is today known as Starwood Hotels & Resorts Worldwide, Inc., a leading global owner/operator of hotels, with ownership of such brands as “Sheraton”, “Westin”, “The St. Regis Luxury Collection” and “W”; (b) contributing a substantial mezzanine debt portfolio to create the company which is today known as iStar Financial, Inc., one of the leading publicly-owned finance companies in the US focused on commercial real estate; and © the acquisition in 2003, in partnership with affiliates of Goldman Sachs & Co., of National Golf Properties/American Golf Corporation, one of the largest owner/operators of golf courses and related facilities in the US.


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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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