Narrative
Full Description
Project narrative
On June 27, 2019, financial close was reached on a deal in which a syndicate of 11 lenders — including China Merchants Bank Co., Ltd. — entered into a $785.90 million USD syndicated debt package agreement with Jackson Generation, LLC — a Delaware-incorporated special purpose vehicle (SPV) wholly-owned by J-POWER Jackson Partners, LLC, a Delaware-incorporated wholly-owned subsidiary of J-POWER Jackson Capital, LLC, a Delaware-incorporated wholly-owned subsidiary of J-POWER USA Investment Co., Ltd., a Delaware-incorporated wholly-owned subsidiary of J-POWER North America Holdings Co., Ltd. (J-POWER USA), a Delaware-incorporated wholly-owned subsidiary of Electric Power Development Co., Ltd. (J-POWER), a Japanese electric utility headquartered in Ginza, Chuo, Tokyo and listed on the Tokyo Stock Exchange — for the 1200 MW Jackson Generation Power Plant Project. The loan was divided into two tranches: a $610.90 million USD term loan tranche and a $75.00 million USD working capital tranche. The debt package carried a maturity period of eight years, a final maturity date of June 27, 2027, a variable interest rate based on LIBOR plus an initial margin of 300 basis points (bps) for one year, then rising to 325 bps for two years, and then 350 bps for two, fees of 0 bps, a debt service coverage ratio from 1.15. China Merchants Bank contributed $55.00 million USD to the $610.9 million USD term loan tranche. In addition to China Merchants Bank, the following lenders contributed to the : Development Bank of Japan Inc. (DBJ) ($67.00 million USD), Bank of America ($71.15 million USD), CIT Bank, N.A. ($56.15 million USD), Crédit Agricole S.A. (Crédit Agricole Group) ($56.15 million USD), FirstBank ($15.00 million USD), KEB Hana Bank ($67.00 million USD), Mizuho Financial Group ($56.15 million USD), MUFG Bank, Ltd. ($56.15 million USD), National Australia Bank (NAB) ($55.00 million USD), and Sumitomo Mitsui Banking Corporation ($56.15 million USD). The $75 million USD working capital tranche was provided by five lenders, each with a $15.00 million USD contribution: CIT Bank, Crédit Agricole, Mizuho Financial Group, MUFG Bank, and SMBC. The proceeds were used by the borrower to finance the construction of the Jackson Generation Power Plant, a 1,200 MW natural gas-fired combined cycle gas turbine (CCGT) power plant located on a 30-acre site at the corner of S. Brandon Road and Noel Road in Elwood, Will County, Illinois, adjacent to the 1.3 GW Elwood Power Plant, approximately 50 miles from Chicago. The plant consisted of two 600 MW units, each with one M501JAC gas turbine from Mitsubishi Hitachi Power Systems (MHPS), a heat recovery steam generator (HRSG), and a steam turbine to generate additional power utilizing the recovered heat. The plant also included a natural gas-fired auxiliary boiler, a diesel-fired emergency generator, a natural gas-fired dew point heater, air-cooled condensing systems, two water storage tanks, two aqueous ammonia storage tanks, two natural gas metering and regulation (M&R) stations, and associated natural gas distribution pipelines. The plant used TOMONI Very Low Load (VLL) technology, allowing it to operate at a output lesser than 25% of the full load in emissions compliance mode. The M501JAC gas turbines came with 15-stage compressors and adopt air cooling for combustors and were designed to operate at a rated speed of 3,600 revolutions per minute (rpm) and a turbine inlet temperature of 1,600°C, with a rated capacity of 425 MW and 44% efficiency in simple cycle operation, while it offers 614 MW plant output with 64.2% plant efficiency in combined-cycle operations. The plant was also designed to burn hydrogen. Electricity generated by the plant would be connected to the electric grid via the existing Commonwealth Edison Elwood substation, while the existing interstate natural gas transmission pipelines of Illinois would supply natural gas for the plant. The plant was to operate as a peaking independent power producer (IPP) that would sell as merchant plant into the PJM Interconnection wholesale electricity market. Once operational, the plant was expected to generate enough electricity for approximately 1.2 million American homes. The project was expected to create up to 500 construction jobs and 35 permanent jobs during the operations phase. The project had an overall cost of $1.5129 billion USD, with $727.00 million USD in equity from the sponsor. In addition to the $685.9 million USD bank debt, Prudential Capital Group arranged a $100 million USD bond. Kiewit Power Constructors served as the engineering, procurement and construction (EPC) contractor while Mitsubishi Hitachi Power Systems Americas, Inc. was contracted to supply the power island, including M501JAC gas turbines and provide maintenance services. Delta Engineers, Architects, & Land Surveyors provided design computations and shop drawings for various precast concrete fire separation walls Norwalk Concrete Industries was responsible for the construction of the fire separation walls. Construction began on June 26, 2019.Commissioning was expected in April 2022. Construction experienced supply chain disruptions from the COVID-19 pandemic, but development proceeded with adjustments and infection control. Commercial operations began on May 4, 2022.