USD2.1bn energy infrastructure Reit launched
Hunt Power, Marubeni, John Hancock Life Insurance (USA), TIAA-CREF and OPTrust Private Markets Group have agreed to form Electric Infrastructure Alliance of America and Gas Infrastructure Alliance of America as real estate investment trusts to invest in the energy infrastructure and gas storage and delivery sectors in the US.
The alliance members will invest up to USD2.1bn to develop and acquire electricity and gas transmission and distribution assets, primarily in Texas, the Great Plains and the desert Southwest.
These will be the first Reits of their kind in the electricity and gas transmission and distribution sector.
"This is an innovative direct investment alliance, leveraging the expertise and active participation of the members, within a new Reit structure that will help to mobilise capital to invest in the electricity and gas transmission and distribution sectors," says Kirk Baker, chairman and president of both EIAA and GIAA, and senior vice president of Hunt Power.
Subsidiaries of Hunt Power will manage the Reits and will invest up to USD322.5m in cash and assets in the alliance. Marubeni will invest up to USD500m, John Hancock will invest up to USD450m, TIAA-CREF will invest up to USD450m, and OPTrust will invest up to USD400m.
"Marubeni, as a leading Japanese investor in the global electric power market, is pleased to join with other world-class investors to look for potential opportunities in the US electric power transmission and distribution sector," says Toshi Fukumura, senior vice president at Marubeni Power International. "This investment provides a strong platform for growth in the US transmission and distribution sector."
As part of the transaction, EIAA will acquire an interest in Sharyland Distribution and Transmission Services, an affiliate of Hunt Power. SDTS will own five line segments and four substations that have been proposed as part of the Competitive Renewable Energy Zone transmission build out in the Electric Reliability Council of Texas. The facilities will be built by Sharyland Utilities and, once completed, will form a loop in the Texas Panhandle and South Plains that will bring wind power to major load centres in Texas.