EIF buys Black River Energy

Energy and power investor Energy Investors Funds Group has acquired power plants in Watertown, New York and Hawaii.

Energy Investors Funds (EIF) Group has acquired Black River Energy and its assets including Black River Generation, located in Watertown, New York and Hawaii-based Hamakua Energy Partners. Terms of the deal were not disclosed. 

EIF Group managing partner Terence Darby led the deal team with vice president Michael Gee.

The sale of Black River is part of a bankruptcy restructuring program by Charlotte, NC-based construction conglomerate JA Jones, which filed for US bankruptcy protection in September 2003. EIF Group was the highest bidder among the four finalists in the auction; as part of the deal, Darby said EIF Group will acquire all of the Black River Generation assets and 50 percent of Hamakua.

Black River Generation is a 50MW coal and pet coke facility that also has permits to burn tire-derived fuel, wood chips and pelletised cardboard. Hamakua, located on the Big Island of Hawaii, is a naphtha-fueled 60MW combined cycle power plant that provides approximately one-third of the island's need, according to a statement.

Darby said the firm was attracted to Black River Energy because of its long-term purchase contracts for buying and selling power. EIF Group usually looks to buy assets that have such agreements already in place since 'revenues are more predictable and there is very little commodity risk.'

EIF Group has not yet decided its plans for the unit, though it is in the process of installing new accounting systems and consolidating operations, Darby said, adding that the assets have expansion potential.

This marks the sixth investment for EIF Group from its fifth United States Power Fund, which closed on December 30, 2003. The power fund target investments in generation, transmission and energy service businesses; the firm has no official headquarters and operates from offices in San Francisco, Boston and New York.

In April, EIF Group invested $50 million toward the $983 million financing to build a 500MW generation plant located outside of New York City. The Astoria Energy plant in Queens would have natural gas capabilities and would be completed in April 2006.