Publication: Channel NewsAsia
Date: 25 January 2011
Headline: GIC to buy 25% stake in 5 US power plants
GIC to buy 25% stake in 5 US power plants
By Jo-Ann Huang | Posted: 25 January 2011 1540 hrs
SINGAPORE: Singapore sovereign wealth fund
Government of Singapore Investment Corporation
(GIC) has agreed to buy a 24.95 per cent stake in a
portfolio of power plants in the United States.
The portfolio consists of five natural gas fired power
plants owned by energy investment firm ArcLight
Capital Partners.
ArcLight will retain a 50.1 per cent majority stake,
while GIC and GE Energy Financial Services will own
25 per cent each.
Experts say GIC may have paid about a US$100
million for the purchase.
A natural gas fired power plant in Georgia,
US
Located in Georgia, the plants can generate more than 2,500 megawatts of power. The
power plants are a critical part of energy supply in the region.
The plants will also support further infrastructure investment in the region to meet growing
demand for power and a power supply reconfiguration expected within the next decade.
"This is an attractive portfolio of contracted power generation facilities in a region
experiencing increasing demand for low carbon, efficient power," said GIC's Global Head of
Infrastructure, Ang Eng Seng.
"The completion of this transaction complements our growing portfolio of infrastructure
investments in the US," Mr Ang added.
ArcLight said the plants should benefit from the economic recovery, tighter carbon
restrictions and a natural gas boom in the US.
With the acquisition, GIC said it is poised to ride the growing demand for clean energy in
the area.
Experts said the five power plants are a good investment opportunity for GIC.
Dr Bernard Lee from the Sim Kee Boon Institute for Financial Economics, Singapore
Management University, said: "If clean energy becomes a prominent feature in the
particular region in terms of energy policy, relative to a lot of coal firing plants in the region,
you can pretty much expect a potential for capital appreciation on that asset itself."
Some of GIC's infrastructure investments include stakes in power and water utilities, as well
as transport assets like airports and highways.
Publication: Channel NewsAsia
Date: 25 January 2011
Headline: GIC to buy 25% stake in 5 US power plants
Currently, about 43 per cent of GIC's entire investment portfolios, worth over US$100 billion,
are based in the Americas.
In addition to its ArcLight investments, GIC currently has stakes in American financial
institutions The Blackstone Group, Citigroup and Kohlberg Kravis Roberts & Company.