Media Coverage

Hedge Funds Buy Stake in California Geothermal Plant

Power Market Today

June 9, 2006

Hedge funds Riverstone Holdings LLC and The Carlyle Group said their Carlyle/Riverstone Renewable Energy Infrastructure Fund I (CRREIF) will buy a stake in a 55 MW geothermal power project in the Geysers in Lake County, CA, from US Renewables Group LLC. US Renewables subsidiary Bottle Rock Power LLC intends to refurbish the steam field and the facility and plans to restart the plant within the next six months. Before the end of 2007, Bottle Rock expects to produce 260,000 MWh/year of baseload renewable power for sale to Pacific Gas and Electric under a 10-year power purchase agreement.

Under the terms of the convertible note and partnership interest purchase agreement, CRREIF intends to acquire an ownership stake and fund additional capital through a convertible note. This is one of the first investments from CRREIF's $685 million renewable energy infrastructure fund.

The Bottle Rock facility was originally constructed, owned and operated by the California Department of Water Resources (DWR) to service its own power consumption requirements. DWR closed the facility in 1990 and subsequently sold it to several investors in 2001 who formed Bottle Rock. USRG purchased a majority stake in Bottle Rock in late 2005.

"Working with Riverstone to bring Bottle Rock back on line is a winning combination for all involved, especially the citizens of California," said Jim McDermott, managing partner of USRG.

Riverstone Holdings and The Carlyle Group are the co-general partners of Carlyle/Riverstone Global Energy and Power Funds. Riverstone, a New York-based energy and power focused private equity firm founded in 2000, has $6.3 billion under management. Riverstone recently announced the final closing of its $685 million renewable infrastructure fund and $3.8 billion conventional energy and power fund. The Carlyle Group is a global private equity firm with $39 billion under management.

Wells Fargo & Co. has invested $5 million in the Carlyle/Riverstone Renewable Energy Infrastructure Fund I LP, marking the financial services company's first investment in a private equity renewable energy fund (see Power Market Today, April 7).

Media Contacts:

Steven Gottlieb
ZENO Group
Tel: (877) 526-0450
steven.gottlieb@zenogroup.com