Conduit Capital Partners LLC, a private equity investment firm focused on the independent electric power and energy industry in Latin America and the Caribbean, today announced it has completed the sale of two of its portfolio companies, Jamaica Energy Partners (“JEP”) for $92.5 million in Jamaica and Mamonal (also known as Proelectrica) for $17.5 million in Colombia. The firm also announced it has entered into a binding agreement to sell its 13.2% ownership stake in Aguaytia, one of its investments in Peru. BNP Paribas acted as exclusive financial adviser to Conduit on the sales.
J. Scott Swensen, Chairman of Conduit, said “We are very pleased with the sale of these assets, which shows the ongoing demand for independent power generation facilities in the region and underscores the strength of Conduit’s strategy, which is anchored by deep industry and local knowledge, the ability to develop local management teams, and the drive to add value over time. Once the Aguaytia sale closes, Latin Power I will be fully liquidated, and we would like to extend our gratitude to our LPs and other partners who helped make this fund such a success. With one asset remaining, we are also extremely pleased that Latin Power II is poised for similar success.”
Latin Power I closed in 1993 with $100 million of committed capital, and Latin Power II closed in 1998 with $157 million of committed capital. Together the funds invested in 18 projects. Both funds have so far returned over two times the invested capital.
Today’s announcement brings Conduit to four realizations in less than two weeks. On December 7th, Conduit announced the $193 million sale of Inelec, a portfolio of three hydro electric power plants in Western Mexico that together generate 52 MWs of energy. Conduit’s Latin Power II owned a 70% stake in the project.
Jamaica Energy Partners (“JEP”) is comprised of two barge-mounted diesel-fired generating facilities with installed capacity totaling 125 MW. Located approximately 60 miles from Kingston, Jamaica, the company became the first independent power producer, or IPP, on the island in 1995. Conduit’s first fund, Latin Power I, purchased a 35.6% stake in the project during its development phase. Subsequently, Latin Power II and III acquired the remaining ownership interests to reach 100% ownership in 2006. Under Conduit’s ownership, JEP completed a 51 MW expansion in 2006. JEP began selling its output to Jamaica Public Service Co. (“JPSCo”), the local integrated utility, under a 20-year power purchase agreement (“PPA”) in 1995, which it extended at the time of the expansion.
“Jamaica is a strategic location for any company operating in the Caribbean, and we consider JEP to be the best run power plant on the island. Furthermore, JEP is 100% managed by Jamaicans, demonstrating the possibilities for this asset and its team as a regional play in an environment where local knowledge is critical to success,” said Juan Paez, a partner at Conduit.
Latin Power I and II, which invested in JEP in 1994 and 2000, respectively, both achieved a 23% IRR, with multiples of 4.4 and 3.4 times invested capital, respectively. Latin Power III achieved an IRR of 42% and 1.8 times capital invested in less than two years.
Mamonal is a 90 MW gas-fired thermal power facility located near Cartagena, Colombia. Owned 100% by the Latin Power I Fund, this plant was built in 1994 and was the first IPP in Latin America. Latin Power I purchased 25% of the project in 1994 and obtained the remaining interest over time. Mamonal initially sold 100% of its power to a group of local industrial companies, but it became a merchant plant in 2002 due to the changing local environment.
“We are pleased with our results with Mamonal, especially as there were difficult periods in the lifetime of our investment in the country. Not only did Colombia go through a recession, but there were also regulatory changes and security concerns during this period. Fortunately, the Colombian economy has recovered strongly thanks to President Uribe’s leadership, and a new regulatory framework in Colombia has given thermal power generators a brighter future,” Paez said.
With Mamonal, Latin Power I achieved a 17% IRR and 3.4 times its money.
Aguaytia, located in Peru, is an integrated natural gas fired project that is managed by a major international energy company. Conduit expects to close on this sale within the next 60 days.
About Conduit Capital Partners
Based in New York City, Conduit Capital Partners, LLC is a private investment firm focused exclusively on the independent electric power and pipeline industries in Latin America and the Caribbean through its management of the Latin Power Funds. Latin Power I was the first private equity fund dedicated exclusively to infrastructure investments. The Funds have made investments in Mexico, Chile, Peru, Brazil, Argentina, Colombia, Jamaica, Honduras and Guatemala. Conduit is presently investing its $393 million Latin Power III fund.