Nov. 30. 2010
Marubeni Corporation, OPTrust Private Markets Group, John Hancock Life Insurance (USA), TIAA-CREF and Hunt Power are pleased to announce the formation of Electric Infrastructure Alliance of America (EIAA) and Gas Infrastructure Alliance of America (GIAA). These alliance members plan to invest up to US$2.1bil in equity to develop and to acquire electric transmission and distribution assets in Texas, the Great Plains and the desert Southwest through EIAA and gas assets through GIAA. Marubeni will invest up to US$500mil with an initial commitment of approximately $90mil, making it the largest investor after Hunt at inception, and will play an active role in EIAA and GIAA.
EIAA and GIAA are first of kind energy infrastructure Real Estate Investment Trusts (REITs). EIAA has assets in the Southwest Power Pool (SPP) and the Electric Reliability Council of Texas (ERCOT). EIAA owns power lines and related equipment and leases them to utility operators. GIAA is a growth vehicle with no current assets.
EIAA will indirectly own 5 line segments and 4 substations that have been proposed as part of the Competitive Renewable Energy Zone (CREZ) transmission build out in ERCOT. Applications for regulatory approval have been filed with the Public Utility Commission of Texas (PUCT) for all 5 segments, with final decisions expected by May 2011. The lines form a loop in the Texas Panhandle and South Plains that will bring wind power to major load centers while enhancing reliability. Construction is expected to be complete in 2013.
Additionally, EIAA has high voltage transmission projects in development throughout its target geography. EIAA and GIAA are seeking to actively partner with utilities, co-ops, municipalities and gas Local Distribution Companies (LDCs) seeking expertise and capital for upgrading their systems.
The U.S. energy infrastructure needs large investments over the coming decades to modernize, support economic growth and to bring new gas and power resources to demand. EIAA and GIAA are very efficient vehicles for deploying some of this necessary capital. The alliance members give EIAA and GIAA financial strength, broad industry experience and the ability to transact in any market environment as targets become available.
Marubeni, as a leading Japanese investor in the world electric power market, will continue looking for potential opportunities in the U.S. electric power transmission and distribution sector. Together with Marubeni’s recently announced investment in Atlantic Wind Connection, this investment in EIAA provides Marubeni with a strong platform for growth in the U.S. transmission and distribution sector. As a leading international IPP, Marubeni will look for further opportunities in the U.S.
About Hunt Power:
Hunt Power, L.P., is part of an affiliation of privately-held companies, which are wholly-owned subsidiaries of Hunt Consolidated, Inc., directed by Ray L. Hunt. These entities are engaged in oil and gas exploration and production, Liquefied Natural Gas (LNG) processing, refining, alternative energy, power, real estate, private equity investments and ranching.
About John Hancock:
John Hancock Financial is a unit of Manulife Financial Corporation, a leading Canadian-based financial services group serving millions of customers in 22 countries and territories worldwide. Operating as Manulife Financial in Canada and in most of Asia, and primarily as John Hancock in the United States, Manulife Financial Corporation offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners.
TIAA-CREF is a national financial services organization with $434 billion in combined assets under management (as of 9/30/10) and provides retirement services to the academic, research, medical and cultural fields.
OPTrust is an Ontario based pension fund that was established in 1996 and is jointly sponsored by the Government of Ontario and the Ontario Public Service Employees' Union (“OPSEU”). OPTrust manages one of Canada’s largest public pension plans, serving more than 82,000 members and pensioners, and has over C$12 billion ($US11.7 billion) in assets under management.