Ares EIF, the power and infrastructure strategy at Ares Management, and Starwood Energy Group Global, a private investment firm focused on energy infrastructure, agreed to sell their interests in Hudson Transmission Partners to an investment vehicle managed by Argo Infrastructure Partners. Financial details were not disclosed.
A unit of PowerBridge of Fairfield, Connecticut, the developer of the transmission project, will continue to operate and maintain the asset on behalf of Argo Infrastructure and other stakeholders. The transaction is subject to customary regulatory approvals and is expected to close later in 2018 or in early 2019.
HTP is a joint venture formed solely to develop, construct, operate and maintain the Hudson Transmission Project, a 660 MW High Voltage Direct Current electric transmission system connecting the PSEG-North zone of the PJM Interconnection to the New York Independent System Operator Zone J power market via a subsea cable beneath the Hudson River.
The line runs about 7.1 miles from a converter station in Ridgefield, NJ to a substation located at W. 49th Street in New York City. About 87 percent, or 575 MW, of the project’s capacity is contracted with the New York Power Authority through a long-term capacity purchase agreement through June 2033. Construction of the project began in May 2011, with a commercial operations date achieved in June 2013.
“HTP is a prime illustration of Ares’ investment strategy to develop a core energy infrastructure asset in a premium location with significant barriers to entry, and create value for our limited partners,” said Andrew Schroeder, Partner with Ares EIF. “The constrained NYC-PJM market dynamics coupled with high quality, long-term contracted cash flows led to a robust and efficient sales process.”
“Starwood is proud to have been involved in taking this project from the concept stage to being one of the marquee transmission assets in the U.S.,” said Himanshu Saxena, CEO of Starwood Energy. “We are pleased to be transitioning ownership to Argo, given their unique experience and capabilities in this sub-sector.”
Norton Rose Fulbright US LLP served as legal counsel to Ares EIF and Starwood; Bracewell LLP acted as Argo’s legal counsel.
Goldman Sachs & Co. LLC and PJ Solomon served as financial advisors to Ares EIF and Starwood.