TEL AVIV, Israel, Sept. 16, 2020 /PRNewswire/ -- OPC Energy Ltd.
(TASE: OPCE) ("OPC"), Kenon Holdings Ltd.'s (NYSE: KEN)
(TASE: KEN) ("Kenon") subsidiary today reports a strategic
step, which puts it in significant activity in the US energy
market. The company has signed a letter of intent to acquire
control of an American company CPV, with an estimated investment of
$ 700-800 million, part of which is
also intended for investment in future projects of CPV. The deal is
still subject to a number of approvals, and to the completion of
the negotiation process between the parties.
Giora Almogi, CEO of OPC Energy said: "We have long recognized
the potential inherent in the US electricity market, with an
emphasis on expanding operations into the field of renewable
energies. We see the US market as one of OPC's strategic target
markets. There is growing momentum for increased development of
renewable energy and a focus on a lower carbon approach to
electricity supply. In parallel, the trends continue with a
modernization of the grid with coal and uneconomic nuclear assets
being retired and the construction of efficient, highly flexible
natural gas power plants for economic and environmental
reasons.
"We have been working for the past year to find a suitable
platform to enter the American market, with one of the important
criteria being that the American company has strong management with
proven experience, and has accumulated significant projects for
continued growth.
"After completing an in-depth search process, as mentioned, we
are pleased to report today a letter of intent for the acquisition
of CPV. It is a pioneering company in its field, dynamic and
growing, operating throughout the
United States in the largest and most significant
electricity markets. The company has proven entrepreneurship and
development capabilities, and since its inception it has initiated
and built power plants with a total installed capacity of
approximately 14,800 MW, of which approximately 9,950 MW of
conventional stations in several markets, and wind-based power
plants with a total capacity of approximately 4,850 MW. The company
currently has a qualitative accumulation of an additional 2,245 MW
for the construction of stations in the fields of renewable energy.
The company currently owns interests in 5 natural gas-based power
plants that have been established in recent years with the most
advanced technology. The Company's operations include the
management of 14 properties in a number of markets for its own
accord as well as for third parties, with the ability to operate in
any major market in the United
States.
"The acquisition, when completed, CPV will become OPC's
investment and expansion platform in the
United States, and will help the company grow and expand its
operations while diversifying the company's revenue sources into a
number of areas, regulations and states. The U.S. electricity
market includes about 1,100 GW of installed power. The U.S. market
as a whole is undergoing a process of changing the energy mix which
includes a significant replacement of coal by natural gas, as well
as the entry of renewable energies. These trends are based on
environmental regulation that limits pollution of power plants,
regulation that favors renewable energy, low gas prices that push
coal stations, and are derived from the older age of coal plants in
the US (average about 40 years). This trend is gaining momentum in
ISO-NE states in the northeastern United
States (New York,
New Jersey, Illinois, Massachusetts, Connecticut, Maryland, etc.) on the basis of local
regulation with renewable energy targets and substantial
restrictions imposed on greenhouse gas emissions.
Due to these trends, the Energy Information Agency expects that
about 130,000 MW of coal-fired power plants and power stations
based on fuel oil and diesel will close by 2030. On the other hand,
the agency expects the construction of over 230,000 MW (wind and
solar).
"The deal also puts OPC directly into the areas of green energy,
and especially into the areas of solar energy and wind energy,
which are marked as part of its and CPV's significant growth
engines, in parallel with its natural gas stations."
The Company's activities include: (1) development and
construction of conventional power plants and renewable energy; (2)
ownership and maintenance of a portfolio of active power plants;
(3) Power plant management for the company and third-party
customers
CPV's development activity includes the successful execution of
44 projects with a total capacity of approximately 14,800 MW over
the last two decades. In addition, the company has accumulated new
projects with about 6,200 MW of capacity, of which about 2,245 MW
in the field of renewable energy, with over 1,100 MW of which are
in advanced stages of development. In the field of conventional
energy, the company has 4 projects based on natural gas in various
technologies at various stages of development with a total capacity
of 3,955 MW.
The company's portfolio includes holdings, together with
partners, in 6 active power plants based on natural gas and wind
energy, located mostly in the northeastern United States in key markets (PJM, NYISO,
ISO-NE). All conventional projects are new, based on the most
advanced technology, with the highest efficiency in the market,
giving the company a long-term competitive advantage as the US
moves toward a lower carbon future.
Under asset management activities, CPV manages 14 power plants
for its own accord as well as for third parties with a total
installed capacity of approximately 10,600 MW in various
technologies and markets, including the California and Texas.
OPC notes that its holding in the acquired company may be about
70%, and that it intends to bring in a number of institutional
investors from the Israeli capital market as partners in the
transaction, and at the time of the report is negotiating with
Migdal, Clal and Poalim Capital Markets in this regard.
For the purpose of financing the transaction, it is expected to
be based on raising capital and / or raising debt (public, private
or banking) and / or cash balances, or a combination of them. Kenon
Holdings, which controls OPC, informed the company that if it was
offered to participate in such capital raising, it would seriously
consider participating in it.
About CPV
CPV (Competitive Power Ventures) is one of the leading companies
in the American electricity market with significant activity of
initiating, developing, constructing and maintaining power plants
in the Northeastern United States
in the attractive markets PJM, NYISO, ISO-NE which supply
electricity to about 100 million inhabitants. These markets cover
the states of New York,
New Jersey, Pennsylvania, Ohio, Massachusetts, Virginia and Maryland, among others. In addition, the
company also operates in the attractive markets of Texas and California.
The company has been operating since 1999 with proven experience
in initiating, developing, financing, establishing and managing
conventional and renewable power plants. The company is
headquartered in Boston and
Washington. The company is run by
Gary Lambert, who is also one of its
founders, and it employs about 90 people. In recent years, the
company has regretted the values of sustainability, green
investments and ESG (Environmental, Social, Governance), which
guide all the projects in which it is involved.
The company's initiation and development activities include the
successful implementation of 44 power plants in various
technologies (wind, mazam, open cycle) with a total installed
capacity of approximately 14,803 MW in a variety of markets in
the United States. The company has
successful experience in the development of stations based on
natural gas with a total installed capacity of approximately 9,953
MW in several markets, including: PJM, ISO-NE, NYISO, CAISO. These
projects are based on the most advanced technology. The company is
currently promoting 4 conventional projects that are in various
stages of development with a total installed capacity of
approximately 3,995 MW.
The renewable energy development and development activities
include the successful implementation of 31 wind farms with a total
installed capacity of about 4,850 MW in various countries in the
US. A large part of this activity has been sold over the years to
the world's leading energy companies including Iberdrola, Dominion,
PG&E, Duke Energy Invenergy and other companies. Today, the
company has accumulated renewable energy projects in various stages
of development with a total installed capacity of about 2,245 MW.
Most of the project accumulation is based on solar energy (about
2,000 MW) and the rest in wind energy. The dynamics in the
Northeastern United States, and in
additional markets for which a significant increase in the
installed capacity of renewable energies is expected in the next
decade.
The company currently owns, together with partners, 5 active
power plants, powered by natural gas, with a total capacity of
approximately 4,045 MW (the company's share - approximately 1,290
MW). These stations are the newest on the market, with the oldest
station in the station fleet starting in 2016, and the newest
station starting in December 2019.
The stations are based on the most advanced integrated cycle
technology, with high efficiency, and meeting the highest
environmental standards. These stations are in the markets PJM,
NYISO, ISO-NE. In addition, the company owns, together with
partners, a similar power plant whose construction began in
August 2020. This station will
operate in the Chicago area with a
total installed capacity of approximately 1,258 MW. The station is
expected to begin operations in 2023. The company's share in the
project is expected to stand at 10%.
In addition, the company owns an active power plant, based on
wind energy, with a total capacity of approximately 152 MW (part of
the company - approximately 106 MW).
The asset management area includes the management of 14 power
plants with a total installed capacity of approximately 10,600 MW.
The company manages the 7 projects that the company owns (including
the management of the construction process of the station currently
under construction) with a total installed capacity of
approximately 5,455 MW. In addition, the company manages 7
properties for third parties (holding companies and investment
funds) with a total installed capacity of approximately 5,140 MW.
The company operates in a number of significant power markets, in
addition to major operating markets, which include the CAISO
(California Power Market) and the Texas Power Market.
WWW.CPV.COM
About OPC
OPC Energy Ltd. is the first and leading private electricity
company in Israel engaged in the
initiation, development, construction and operation of power
plants, as well as electricity generation and supply to private
customers and the IEC. The company owns 80% of the Mishor Rotem
power plant project, in 100% in the Hadera power plant project, and
100% in the Tzomet power plant project, which is under
construction.
OPC Energy published its financial results for the first half of
2020 last month. The company ended the half with revenues of
NIS 577.5 million, and with EBITDA of
NIS 133.7 million. The company's
shareholders' equity, as of the end of the first half of the year,
amounted to NIS 810.6 million
(NIS 751.8 million attributed to
shareholders), and the company's cash, according to the
consolidated balance sheet, has cash and deposits totaling
NIS 902.5 million.
At the beginning of last July, the commercial period of
operation of the power plant set up by OPC in Hadera began, with a
total volume of approximately 144 MW.
WWW.OPC-ENERGY.COM
Contact:
Tzahi Goshen,
CFO, OPC Energy
Tzahi.Goshen@opc-energy.com
+972732505645
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SOURCE OPC Energy Ltd