We, The Chugoku Electric Power Co., Inc. (“Chugoku Electric”), are pleased to announce that we have concluded sales and purchase agreements of 16.2% ownership interests in the natural gas fired power generation which is in commercial operation in the state of Connecticut in the United States with funds of Ares EIF* through the subsidiary newly established in the US** on May 14th (US time). This case is our first participation in the power generation business in the US.
The project is to sell electricity generated by a natural gas fired power plant (Kleen energy power plant) owned by Kleen Energy Systems, LLC (“Kleen Energy Systems”) through the wholesale power market in the northeastern United States, and also has been secured stable revenue through long-term capacity contracts*** concluded with a local electricity company.
We have positioned overseas business as one of the growth areas while the competitive environment of the domestic electric power business is becoming increasingly severe. Utilizing the knowledge of the electrical business we have cultivated so far, we will continue to participate in new overseas opportunities and work to strengthen our profitability.
* A major U.S. infrastructure investment fund, invested in nearly 9,000MW of greenfield generation over the past 15 years.
** Chugoku Electric Power America, LLC, a wholly-owned subsidiary of Chugoku Electric.
*** A contract to pay for the supply capacity (kW) value separated from the electricity (kWh).