EIF-owned power plant explodes

Five people were killed and at least 12 others injured when a private equity-backed power plant exploded in Connecticut Sunday.

An Energy Investors Funds-backed power plant that was to rank among the largest new power plants in New England exploded Sunday, killing five people and injuring at least 12 others in Middletown, Connecticut.

Middletown officials suspect natural gas ignited the explosion, which rocked the 620 megawatt oil- and gas-fired Kleen Energy Plant.

All people present at the blast have been accounted for, according to a statement from Middletown’s Mayor.

The plant was majority-owned by Energy Investors Funds, a private equity firm focused on US electric power assets.

Energy Investors Funds said in a statement that it “wishes to express our enormous sympathy and concern for the workers at the Kleen Energy plant and their families”.

“We strongly value their contributions, efforts and dedication. We are fully cooperating with authorities, and will provide further comment once more information becomes available,” the statement continued.

Energy Investors Funds invested in the project from its second fund, US Power Fund II, which closed on $750 million in 2005. The firm contributed 80 percent of the project’s $361 million in equity, according to the Boston Herald. The firm also raised $985 million in debt financing for the project in 2008, according to a press release.

Energy Investors Funds won the Kleen Energy Plant development in a competitive bidding process run by the state of Connecticut, according to the press release. Kleen Energy had a 15-year capacity agreement with Connecticut Light and Power for the electricity produced by the plant.

Click here for BBC News' photo coverage of the explosion and its aftermath.