Energy Investors Funds announces $295 million bond financing for Crockett Cogeneration

BOSTON, Mass., March 23, 2005 — Energy Investors Funds, an established private equity fund manager that invests in the energy and electric power sector, announced that Crockett Cogeneration – which was acquired by its U.S. Power Fund, L.P. in November 2002 – has tapped the bond market for a $295 million 20-year Senior Secured Rule 144a Notes issuance.

The bonds have been given ratings of Baa3/ BBB- by Moody’s Investors Service and Standard & Poor’s, respectively. Proceeds from the bond issuance were used to refinance the project’s existing bank debt of approximately $200 million, and to make a cash distribution to the equity partners.

In operation since 1996, Crockett is a 240-megawatt natural gas fired cogeneration plant located in Crockett, CA, outside the San Francisco metropolitan area. The project has a long-term power purchase agreement with Pacific Gas and Electric Company, which is rated Baa1/BBB. The power purchase agreement terminates in 2026, approximately one year after the maturity date of the Notes. Crockett is the largest qualifying facility in PG&E’s system, and sells steam to the C&H Sugar Company refinery located adjacent to the plant.

“We decided to pursue the refinancing of the Crockett project through a Rule 144a notes offering because we believed that would result in the optimal financial structure for a project with Crockett’s characteristics,” said Mark Segel, Energy Investors Fund’s partner who led the recapitalization effort. “Crockett’s successful operating history and stable cash flows associated with its long-term power purchase agreement with PG&E were very well received by the capital markets.”

“Through three distinct private equity funds, Energy Investors Funds holds a majority economic interest in the Crockett project. The closing of the refinancing is great news for Crockett and the investors in our funds,” adds John Buehler, managing partner Energy Investors Funds.

About Energy Investors Funds Group [ ]

Energy Investors Funds Group 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.

The Group has mobilized over $1 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 U.S. Power Fund, L.P.

The U.S. 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.

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