New England Power Company

Profile: New England Power Company (NEPC), a subsidiary of Quantum Group , is a very active participant in the international independent power production market. NEPC takes the role as an early stage developer of power plants. Over the years, NEPC has been able to successfully assist developing countries with their electric power needs, including implementing a 116 MW Barge-Mounted Power Plant in Bangladesh on a fast track basis.

From conception of the need for the building a power plant to the complete implementation of the project, NEPC has the commercial and technical knowledge to work with local government electric utilities on an ongoing basis to identify the appropriate equipment selection, fuel and site requirements.

Asset Portfolio: One 116 MW operating plant; one 536 MW project under construction; three projects in total 1,450 MW at various stages of development and a planned portfolio of power generation assets acquisitions totaling 724 MW. Net  equity in financed projects is 280 MWs. ( see Acquisitions Strategy)

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Operating :                     116 MW                  Under Construction:        536 MW   

In development:            1450 MW                  Planned Acquisitions:         724 MW

TOTAL                           2826 MW

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Focus:  New England Power Company’s (NEPC) growth strategy focus’s on:

a)   Development: Pursuing private power projects primarily in emerging countries. By using its established global network of political & commercial contacts, it has been successfully nominated in several emerging countries as a pioneer independent power developer for viable projects. It takes a lead role during the early stages of development selecting sites, turn-key contractors and equipment suppliers. Then, at a later stage negotiating fuel, power purchase agreements. At the appropriate stage, its seeks suitable partners and financing facilities to successfully complete the projects. The company’s strengths are in fast track project implementation and providing competitive quality O & M services. NEPC also pursues projects for projects for power plant rehabilitation.

b)   Acquisitions: NEPC, backed by few major private equity funds, has planned a North American power plant asset acquisition plan for 2008-2014 which includes 724 MWs ( existing or under construction) in coal, natural gas and renewable energy based power plants. It is also participating in bidding for power sector privatization in select emerging countries.

c)   Alternate Energy: NEPC and its affiliates are actively developing wind farms ( 20-250 MWs), solar parks,fuel cell technologies as well as some large geothermal projects in Europe.

Corporate History: New England Power Company which has decades of successful power development experience in emerging county infrastructure and project finance. It is backed by a few multi-billion private equity funds.

NEPC is a majority shareholder and lead developer of GTS International (Nig.) Ltd. Of a gas based 536-MW project in Ajoakuta, Ogun State, Nigeria awarded as part of an Emergency Power Program(EPP) with the National Electric Power Authority. The plant will be commissioned in late 2011. An additional 500 MW will be installed at the next phase in  2012..

NEPC has won three global tenders in Bangladesh , each for a 100 MW barge-mounted power plant. The Government of Bangladesh will award an additional 450MW project to NEPC. Previously, NEPC completed a 116 MW project at Haripur, Bangladesh. NEPC later sold most of its interest to El Paso International, Covanta and Wartsila . Currently, NEPC is pursuing additional 450 MW gas fired project in Bangladesh.

The company is now pursuing other power plants in Africa, Latin America , the Mid-East and India.

Country involvement: North America, West Africa, Bangladesh, the Caribbean, Latin America and Mid-East

Partnerships: NEPC creates a consortium involving one or more partners for implementation of its projects including an O& M partner. Through direct participation, joint development agreement and joint venture agreements with well known power plant developers, New England Power Company seizes the opportunity to develop, build and operate with the most optimal business model for achieving the highest financial return on the project.

The company has partnered with El Paso International , Covanta Energy , Wartsila NSD, and other world-renowned companies on power projects.

Power Plant Acquisitions:

Because many strategic power developers over-expanded and as a result became over-leveraged, many power projects have been offered for sale in Eastern Europe, Asia and Latin America. As discrete investments, acquisition properties are attractive because they do not require development or present construction risks and provide immediate cash flow and earnings. Most of the time, however, these asset sales involve competitive processes.

New England Power Company has been successful in seeking acquisitions and arena given a willingness to perform greater due diligence in making transactions more tax efficient and applying complex financial structuring to maximize early equity cash flows. This requires less Project Finance capability that is needed for green-field project development and greater M&A savvy. Acquisition equity investments are important components of our funds for several reasons:

·         Project Benefits

·         Completed electrical power plants eliminates project construction and mitigates fuel  risks

·         Provides an immediate revenue stream

·         Ensures portfolio diversification

Acquisition of assets lead to new sources for other green-field projects and in many cases, there are transactions where a purchase and renovation of an existing plant would award us a green field plant.

As NEPC looks to the independent power industry , it expects that a significant emphasis will be placed on green-field projects -- the actual development and construction of electric power plants.

These capital-intensive projects require that principal construction costs be incurred and cash reserves for debt service and maintenance be secured before cash distributions can be made. Typically, this means that investors do not see dividends until a year or so after commercial operation has commenced.

NEPC  pursues greenfield construction projects in accordance with the project finance models  which including the merchant independent power plants. Additionally, in the case of some greenfield projects, Power Purchase Agreements ("PPAs") are entered to substantially reduce the variability and currency risk of their revenue streams. 

Development Equity

NEPC is backed by a few major private equity funds , which provide development equity - an investment before full financial closing has been achieved -- to select green-field projects to ensure their overall financeability. These investments are also critical to NEPC's long-term interests in establishing relationships with quality developers and maintaining a pipeline of future opportunities.

The amounts invested are significantly less than in a typical project acquisition opportunity. Given the higher risk involved, per-transaction amounts are determined by examining the obstacles that remain to closing the project financing.

These green-field projects present significant investment upside for several reasons:

Project Benefits

·     Greater controls in market selection, design specifications and operational goals result in better performance

·     Investments ensures portfolio diversification

·     IRR performance for many of NEPC’s projects well in excess of 20% -- among the highest equity returns in the power industry

Typical Acquisition Project Profile:

Development Strategy Services

Since the deregulation of the utility industry, many countries are allowing the private independent power producers (IPPs) to generate electric power to meet their nations' rapidly growing electric power demands.

New England Power Company has set a corporate goal of exploiting these opportunities of setting-up of new power niche market .in the under-250MW category and has been able to procure several projects due to its long established political and commercial relationships in various countries. These projects are in various

Through the New England Power Company's Advisory Services Group, it has forged decades of relationships in the global commercial and investment banking as well as bilateral and multilateral agencies.

NEPC has access to myriad of sources of equity funds and debt syndication strategies to fund these projects. NEPC has been working in several countries assisting government owned utilities in their power plant rehabilitation and privatization programs. New England Power Company has also successfully identified projects in field of renewable energy such as geothermal and wind power. It has extensive in-house know-how for building barge-mounted power plants. NEPC embarked in 1993 to meet the emergency power demands of developing countries by specializing in Barge or Platform mounted power plants. Since developing countries need power generation on a fast track basis, NEPC is in a unique strategic position for the challenge.

The New England Power Company intends to focus in 2008-2010 on the Indian subcontinent for power projects both IPP and turn-key contracts. The New England Power Company generally participates in every phase of the development from global tender process to commissioning of the power plants. New England Power Company typically invests in the early stage development of private power project and at a more advanced stage it has the expertise and flexibility to mobilize the equity and non-recourse debt financing.