Financing Finalized for Lordstown Energy Center
April 6, 2016
The village announced that the financing of the Lordstown Energy Center Project has been finalized and construction will begin soon.
Full story below by the Business Journal.
LORDSTOWN, Ohio – Construction on an $890 million electrical power plant just off state Route 45 is set to begin immediately, an executive says.
The deal to build a 940-megawatt natural gas-fueled power plant — named the Lordstown Energy Center — closed Wednesday morning, said Bill Siderewicz, president of Clean Energy Future, LLC, the developer behind the project.
“Today and tomorrow, you’ll see heavy construction equipment at the site,” Siderewicz said in a phone interview Wednesday.
Siderewicz said the deal involved a 65-member conference call connecting attorneys and executives in the United States, France, the United Kingdom and China. “It’s an interesting process,” he reflected. “This closing incorporates more than 5,000 pages of documentation.”
The major lenders of the project include Bank of America, London-based Investec, Credit Agricole of Paris, and ICBC, based in China, Siderewicz said. This consortium will provide the $445 million term debt to fund construction.
Macquarie Infrastructure Partners III, a division of Australia-based Macquarie Infrastructure and Real Assets with a portfolio of $100 billion, and Siemens Financial Services partnered on the project. Macquarie will provide 73% of the equity investment and Siemens Financial will provide the remaining 27%.
“Siemens is proud that we were able to support this project by leveraging our financial services capabilities alongside our power generation solutions,” Kirk Edelman, CEO of Energy Finance, Siemens Financial Services, said in a statement. “Siemens funded the development loan as well as an equity investment in Lordstown, underscoring our commitment to the long-term success of this project.”
The turnkey solution for Lordstown will include two SGT6-8000H gas turbines, one SST-5000 steam turbine, two SGen-1200A generators as part of the gas turbine packages, one SGen-2000H generator as part of the steam turbine package, and a Siemens SPPA-T3000 integrated plant control system, according to Siemens.
Excavation crews have already cleared trees at the 17-acre site along Henn Parkway, Siderewicz said. That’s because crews needed to evacuate the trees before April 1, since the area is a seasonal habitat for Indiana bats. “We had to get out there the last couple of days of March to clear the place out, about five or six acres.”
Once finished, the natural gas-fueled power plant will be able to generate 940 megawatts of electricity, enough to power about 800,000 homes. The plant will replace a portion of the more than 18 gigawatts of coal-fired generating capacity in the region that has been retired since 2012.
Construction jobs could number upwards of 450 total throughout the course of the 2-year-build project. Officials have said they want to complete work and have the plant in operation by mid-2018. Once operational, the plant would employ about 20.
Initially, principals wanted to get started on the project toward the end of last year. But Siderewicz says the late start would not delay the project since the primary contractor, Siemens Electric, has already started to perform engineering and equipment work offsite.
“They’ve invested about $22 million to do detailed engineering and were way out over their skis hoping that today would happen,” he said. “We look to be up and running by May 2018.”
Lordstown was selected in part because it sits in the heart of the Utica and Marcellus shale natural gas play, which ensures a long-term supply of low-cost natural gas to fuel operations.
Mayor Arno Hill says the village first learned of the project more than two years ago, noting it’s been one of the more complicated development projects the village has ever undertaken. “There were a lot of ‘i’s and a lot of ‘t’s to cross. Good things come to those who wait,” he said. “The trade unions are ecstatic.”
Among the major institutions that will benefit from the project is the Lordstown School District, Hill said. “This project saved our schools,” he remarked.
Under an agreement approved last year, Clean Energy Future will provide Lordstown schools with a 15-year tax payment plan once the plant becomes operational. The deal calls for Clean Energy paying the school district $1 million a year for the first five years, $1.25 million for the second five years, and $1.5 million for the remaining five years of the plan.
The school district is to receive another $500,000 once the project breaks ground. It will receive another $400,000 to go toward the demolition of the vacant middle school at the corner of Salt Springs and state Route 45.
Kokosing Construction of Fredricktown, Ohio, is the general contractor on the project under Siemens’ direction, and MJ Electric is the lead contractor on an electric switchyard that will also need to be built.
As for a second plant at the site, Siderewicz says the partners over the next six months or so will conduct an analysis that includes capacity, water resources and other variables before any decision is made. “It’s certainly technically feasible,” he said.
For now, Siderewicz said he’s concentrating on developing this project and expressed gratitude to all of the parties that made the project happen, including the Village of Lordstown, the Youngstown Warren Regional Chamber, the lenders and the building trades.
“There are a lot of anxious contractors that will be running out there with a lot of heavy equipment starting today,” Siderewicz said.