ICBC contributes $90 million USD to the $539.7 million USD construction term loan tranche of a $679.2 million USD syndicated loan for the 720 MW CPV Valley Energy Center Project

Project narrative

On June 12, 2015, financial close was reached on a deal in which a syndicate of 11 banks — including the Industrial and Commercial Bank of China (ICBC) — entered into a $679.20 million USD syndicated loan agreement with CPV Valley Holdings, LLC — a Delaware-incorporated special purpose vehicle jointly owned by Competitive Power Ventures (CPV) (50% equity stake) and DGC Valley, LLC, a Delaware-incorporated company and wholly-owned subsidiary of Diamond Generating Corporation (DGC), a wholly-owned subsidiary of Mitsubishi Corporation Americas, a wholly-owned subsidiary of Japan's Mitsubishi Corporation (50% equity stake) — for the 720 MW CPV Valley Energy Center Project. This loan was divided into four tranches: a $539.70 million USD construction term loan tranche; a $124.50 million USD letter of credit tranche; and a $15.00 million USD revolver tranche. This loan carried a maturity period of eight years, a final maturity date of June 30, 2023, and an interest rate of LIBOR plus an initial margin of 325 basis points (bps). ICBC contributed $90.00 million USD to the $539.7 million USD construction term loan tranche. Record ID#105510 captures its contribution. In addition to ICBC, the following lenders contributed to the construction term loan tranche: BNP Paribas S.A. ($47.40 million USD), CIT Group ($43.50 million USD), CoBank ($25.00 million USD), Crédit Agricole Group ($39.90 million USD), ING Group N.V. ($43.50 million USD), MUFG Union Bank ($39.90 million USD), Mizuho Bank ($43.50 million USD), Norddeutsche Landesbank Girozentrale (NORD/LB) ($43.50 million USD), Siemens Financial Services GmbH (SFS) ($80.00 million USD), and SunTrust Bank ($43.50 million USD). BNP Paribas, CIT, Crédit Agricole, ING Group, MUFG Union Bank, Mizuho, NORD/LB, and SunTrust each contributed $15.56 million USD to the $124.5 million USD letter of credit tranche. Crédit Agricole and MUFG Union Bank each contributed $7.50 million USD to the $15 million USD revolver tranche.. Crédit Agricole and MUFG Union Bank served as lead arrangers. ICBC, BNP Paribas, CIT, ING, Nord/LB, SFS, and SunTrust served as joint lead arrangers. The proceeds were to be used by the borrower to finance the construction of the 720 MW CPV Valley Energy Center, a natural gas-fired combined-cycle power plant with ultra-low sulfur diesel backup located over an area of 21.25 acres on a 122-acre greenfield site in Wawayanda, just outside Middletown, Orange County, New York, located 105 kilometers northwest of New York City, operating on a merchant basis in Zone G of the New York Independent System Operator (NYSIO). The buildings at the site would be approximately 130 feet and the combustion turbine stacks would be 275 feet high. The plant included a 965,000 galloon of fuel oil storage tank, a 15,000 gallon aqueous ammonia storage tank, and a 400,000 galloon demineralised water tank. Output from the plant would be conveyed to the New York Power Authority’s (NYPA) 345 kV Marcy South transmission line in Middletown, with an underground transmission line and a 345 kV gas-insulated switchgear (GIS) to be constructed to facilitate the interconnection. An eight mile (13-kilometer) long lateral natural gas pipeline connected to the Millennium Pipeline Company's mainline pipe would supply the plant, giving 130,000 dekatherms a day (Dth/day) of natural gas per day. The exhaust heat from the gas turbines would be conveyed to heat recovery steam generators (HSRGs) that integrate natural gas-fired duct burners to produce steam, then driving the steam turbine generator and producing the additional power. The plant was expected to mitigate the ratepayer impacts of the then- recently instituted new capacity zone in the lower Hudson Valley by reducing electricity prices by roughly $273 million USD annually. The plant would sell power on a merchant basis with a five-year revenue hedge. The $775 million USD project would be capable of supplying at least 650,000 homes. The plant was claimed to be one of the cleanest power generating facilities in the state of New York and was claimed that, through its first 15-years of operation, that it would lower carbon dioxide emissions by about 494,000 tons annually. The plant was designed to feature advanced air cooling and recycled water from the Middletown water waste treatment plant, reducing water use by approximately 85% compared to traditional "wet" cooled facilities. The dry cooling technology would minimize use of water and control cooling tower effluents. The plant also featured selective catalytic reduction (SCR) technology, an advanced, dry, low-nitrogen oxides (NOx) combustion system for the turbines and water injection to control NOx emissions, whereas an oxidation catalyst would be used to control carbon monoxide (CO) and volatile organic compound (VOC) emissions. Skanska, Burns & McDonnell, ECCO III (SBMEJV), a joint venture of Skanska USA Civil Northeast, Inc., Burns & McDonnell Engineering Company, and ECCO III Enterprises, won a kr2.1 billion SEK ($255 million USD) engineering, procurement, and construction (EPC) contract in July 2015. Siemens provided two of its SGT6-5000F Gas Turbines and one of its SST-5000 Steam Turbines and three of its SGen-1000A electric generators for the project. John Cockerill Group supplied steam boilers for the project. National Welding Corporation was contracted to subassemble, fit, and weld 7′ to 24′ diameter manifolds for power plant cooling water. Advance Testing Company Inc. provided various testing and inspection services, including steel and welding, soil compaction testing, asphalt field inspection and testing, reinforcing steel inspection, concrete testing, structural steel inspection, bolting inspection, non-destructive testing of welds, and inventory management. Perreca Electric Co., Inc. served as an onsite electrical contractor. Atlas Security Services Inc. provided security services. Atlantic Insulation provided insulation services. Absolute Ace, Inc. served as acoustical insulation contractor, Zampell Scaffolding, LLC provided scaffolding services. TRC served as environmental consultant. The plant was first proposed in 2008. By June 2014, all major approvals required for the construction were received. Construction was scheduled to start in 2015. 900 union laborers were employed during construction, with 23 full-time plant staff permanently employed. Commercial operations were scheduled for February 2018, but delayed because the New York State Department of Environmental Conservation (DEC) had not finished permitting Millennium Pipeline Co.’s Valley Lateral Pipeline, which would supply the plant with gas. In February 2018, the plant began to burn diesel fuel and run on a test basis for a few days. On July 9, 2018, it began tests of its two Siemens’ SGT6-5000F gas turbines and one Siemens’ SST-5000 steam turbine. The plant began commercial operations on October 1, 2018. The plant was the source of local opposition. In late September 2018, at public hearings, various residents complained of illness and the noise generation during the plant's test runs; the City of Wawayanda cited the plant for noise violations. Opponents cited the plant's greenhouse gas emissions, its dependence on fracking in Pennsylvania and potential driver of fracking in New York State, and otherwise non-renewable nature of natural gas. Supporters pointed to the economic benefits of the projects, including cheaper electricity prices, union jobs, and a more reliable grid. A specific issue was about the federal Title V Clean Air Act permit for the plant. New York State originally issued a air permit to CPV which expired on July 31, 2018; on August 1, 2018, DEC told CPV that the permit would not be renewed based on failure to meet regulatory requirements, and that the federal Title V permit from the U.S. Environmental Protection Agency (EPA) would be necessary for the plant to operate; the permit required a more-comprehensive application with more time for public input and an EPA review period of at least 45 days. CPV then sued DEC after the denial of the air permit and asked for a hearing on the matter, seeking an injunction to allow the plant to operate and argued it had one year to acquire the Title V permit. DEC was supported by Orange County officials and local politicians. In mid-August 2018, the Supreme Court of the State of New York allowed the plant to resume startup tests pending a decision on the federal air permit. On May 29, 2019, DEC released two draft Title V and Title IV air permits for public comment, with a hearing on July 17, 2019 bringing a number of opponents to speak asking for the plant to be shut down. Allegations of illness, health, climate change, and corruption. A judge allowed CPV to continue operating while litigation over permit renewal continued, and as of October 2023 the plant operated under a pre-construction Air State Facility permit. Further issues with CPV occurred when New York Governor Andrew Cuomo's former executive deputy secretary Joseph Percoco was convicted in 2018 on bribery charges of honest services fraud, conspiracy to commit honest services and solicitation of bribes and gratuities that involved state business with two companies, including the CPV plant, while former CPV senior executive Peter Galbraith Kelly pled guilty to fraud conspiracy in federal court to arranging a "low-show job" for Percoco's wife that paid nearly $287,000 USD between 2012 and 2016, which federal prosecutors alleged helped the plant receive a power purchase agreement / hedge, as New York State was seeking replacements for the announced-to-be close Indian Nuclear Plant. Kelly's case had resulted in a hung jury before his guilty plea, and elements of Percoco's conviction were thrown out in 2023 by a U.S. Supreme Court decision, albeit not the ones related to CPV. By June 2023, CPV Valley had applied for a Title V environmental permit to replace its combined Air State Facility and a pre-construction Prevention of Significant Deterioration permit, which it needed to keep operating. In October 2023, the New York Senate Committee on Investigations and Government Operations announced plans to investigate communications among CPV, DEC, and then-former Governor Cuomo’s administration. On June 27, 2023, financial close was reached on a deal in which a syndicate of 15 banks — including ICBC — entered into a $570.26 million USD syndicated loan agreement with CPV Valley Holdings, LLC for the 720 MW CPV Valley Energy Center 2023 Refinancing Project. This loan, specifically an amendment-and-extension, carried a maturity period of three years, a final maturity date of May 31, 2026, an interest rate on SOFR plus a margin (the weighed average spread of approximately 5.75% at signing) and was divided into four tranches: a $360.26 million USD term loan tranche; a $100.00 million USD revolver tranche; a $100.00 million USD credit facility tranche; and a $10.00 million USD working capital tranche. CPV Valley was required to repay $55 million USD of the original loan. The loan carried scheduled amortization payments prior to maturity and a revised cash sweep provision The proceeds were to be used by the borrower to refinance the previous loan for the CPV Valley Energy Center. Each lender, including ICBC, contributed $24.02 million USD to the $360.26 million USD term loan tranche, $6.67 million USD to the $100 million USD revolver tranche, $6.67 million USD to the $100 million USD credit facility tranche, and $0.67 million USD to the $10 million USD working capital tranche. Record ID#105511 captures ICBC's contribution to the $360.26 million USD term loan tranche. Record ID#105512 captures ICBC's contribution to the $100 million USD revolver tranche. Record ID#105513 captures ICBC's contribution to the $100 million USD credit facility tranche. Record ID#105514 captures ICBC's contribution to the $10 million USD working capital tranche.