Company Overview:
The East Windsor cogeneration project is a natural gas fuelled 84MW combined heat and power facility that sells process steam to Ford. This cogeneration facility results in significant improvements in the thermal and operational efficiency of the Ford facility. Two gas turbines operate and sell electricity to the Ontario Power Authority under a 20 year combined heat and power contract to 2029.
Transaction Description:
In 2007, CFI Fund I invested $15.425 million in Pristine Asset LP (the CFI Fund owned 50% of Pristine Asset LP, and 49% of the related GP) as an equity contribution for the underlying East Windsor cogeneration project. Pristine Asset LP owned 50% of the East Windsor cogeneration project. The East Windsor plant cost approximately $212 million to build and was financed with equity from CFI I Fund and its partner, together with approximately $180 million of 20-year fixed-rate senior debt.
In late 2011, an agreement was reached to sell the CFI Fund I ownership stake back to Veresen Inc. (the $2 billion market capitalization energy company that owned the other 50% of Pristine Asset LP, and a direct 50% interest in the East Windsor project).
CFI Role:
The developers of this project were known to CFI, and CFI executives played a role in sourcing this opportunity. James McBride was involved in all aspects of the transaction evaluation, deal structuring and legal closing. Kevin Andrews served on the Board of Directors.
Investment Thesis:
Given the long-term agreement with the Ontario Power Authority, it was expected that the project would generate attractive returns for CFI Fund I. The transaction also provided an opportunity to build a relationship with the developer and to partner on additional projects.