By: Kalliope Gourntis, Infrastructure Investors
Texas Microgrid, a new joint venture between the UK-listed infrastructure fund manager and microgrid operator ERock, marks BBIP’s second investment in North America.
Basalt Infrastructure Partners, the funds management business of UK developer Basalt Infrastructure Partners, has partnered with Enchanted Rock (ERock), a Houston-based microgrid developer and operator, to form Texas Microgrid.
BBIP and ERock recently announced the closing of equity financing that will fund the construction of microgrid power assets in Texas, which will provide back-up power to commercial and industrial customers using natural gas. Both firms declined to disclose the equity split of the joint venture as well as the amount of financing raised.
BBIP Partner Jeff Neil, however, confirmed that the fund manager will be financing its portion of the project, including construction, through its debut fund, which it closed on $618 million last September.
ERock will be responsible for origination; engineering, procurement and construction management; as well as operating the assets once they are online
The contracts we’re signing involve providing reliability service to customers in times of a power outage and delivering value to them during those periods,” ERock’s chief financial officer Ian Blakely told Infrastructure Investor.
“Texas Microgrid will also have the ability to sell services and power into the ERCOT market as well, at times of stress on the power grid and when it makes economic sense relative to our operating costs,” Blakely added. The contracts the company has signed so far have an average term of 15 years and involve between 40 and 50 locations in the greater Houston and Dallas/Ft. Worth areas.
“We are excited about partnering with ERock, a company that has in-depth knowledge of the Texas market,” BBIP partner Jeff Neil told Infrastructure Investor on Tuesday. “We are excited about expanding and supporting Texas Microgrid beyond the current 50MW,” he added, referring to the contracts the company has already signed with customers for more than 50MW of power.
Texas Microgrid is BBIP’s second investment in North American infrastructure. The first is Upper Peninsula Power Company, a regulated electric utility business that provides distribution and power supply services to about 52,000 customers in the Upper Peninsula of Michigan. BBIP acquired the utility in January 2014 from New York-listed Integrys Energy Group.
Other assets in BBIP’s portfolio include McEwan Power, a portfolio of 10 UK-based solar parks; Wightlink, a ferry operator to the Isle of Wight; and UK power generator Alkane Energy.
The firm was established in 2011 as a partnership between a team of infrastructure investment professionals and UK developer Basalt Infrastructure Partners. BBIP focuses on the North American and European mid- market infrastructure sectors of utility, energy and transportation. It targets low volatility assets that are either in the operational or late-stage construction phase, according to its website.
