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First Reserve and GenPower Announce Formation of GenPower Holdings and Commitment to Fund $1.8 Billion Longview Project

Posted on: Friday, 13 October 2006, 09:03 CDT

GREENWICH, Conn. and NEEDHAM, Mass., Oct. 13 /PRNewswire/ -- GenPower, LLC ("GenPower") and First Reserve Corporation ("First Reserve"), a leading global private equity firm, today announced their agreement to form GenPower Holdings, L.P. ("the Company"), a new joint venture that will pursue the development, ownership, acquisition and operation of power generation facilities in the United States and abroad.

GenPower is contributing to the joint venture a portfolio of projects under development and an existing team of power development professionals to manage the Company. The first plant to be financed by the new entity is expected to be the Longview coal project ("Longview"), a supercritical, pulverized coal-fired generating facility to be located in Maidsville, West Virginia. The Longview plant will be one of the largest investments in the history of West Virginia and it follows a long tradition of involvement by First Reserve Corporation in the state.

Longview will represent a total investment of approximately $1.8 billion, the equity for which is expected to be provided by First Reserve through GenPower Holdings. Longview has received substantially all necessary permit approvals and is currently finalizing EPC contract negotiations with a consortium of Siemens Power Generation, Inc. and Aker Kvaerner Songer, Inc. Ground breaking is expected in January 2007 and commercial operation in late 2010. Longview will sell a portion of its output to various parties under intermediate term power purchase agreements with the remaining output to be sold into the PJM merchant market or opportunistically sold under additional long-term contracts.

"We are very pleased to be entering into this agreement with First Reserve Corporation and look forward to completing the financing and commencing construction of the Longview Plant," said Bob Place, the Chairman of GenPower and the new Chief Executive Officer of GenPower Holdings. "We have a number of new coal, natural gas and wood fired plants in development as well as significant re-powering opportunities and welcome the synergy of talents and resources between our two organizations." Goldman, Sachs & Co. ("Goldman Sachs") acted as financial advisor to GenPower with respect to Longview.

Environmental Benefits

The Longview project will also provide environmental benefits to its surrounding regions. Longview will use treated acid mine drainage water ("AMD") from abandoned underground mines as the source of its cooling water, which will reduce the risk of significant discharges of AMD into local streams and rivers. AMD Reclamation, Inc ("AMDRI"), a non-profit entity established by GenPower to construct and operate the water supply treatment facilities, has built and is now operating the first primary treatment plant. Construction of a second water treatment facility is planned to start this fall.

In addition, Longview will be funding an ongoing program to assist in the reforestation of West Virginia strip mining lands and assist in the treatment of waters through a foundation to be established with the Sierra Club and Trout Unlimited once the plant goes into commercial operation. Longview will be amongst the cleanest and most efficient coal-fired plants in the U.S., utilizing highly efficient boiler design and best available pollution control technology to minimize air emissions.

About GenPower

GenPower specializes in the development of electrical generation plants. GenPower was formed by power industry veterans who have extensive experience in power project development, finance, construction and operations. To date, GenPower and members of its management team have successfully developed and built an 800 MW mine-mouth coal plant in Australia; financed, built and operated four biomass facilities in New England, and have worked on coal and hydro plant developments in India and Turkey. GenPower has also successfully developed over 1,800 MW of natural gas-fired combined cycle electric generation facilities in the U.S. For more information on GenPower visit http://www.genpower.net/.

About First Reserve

First Reserve Corporation is the oldest and largest private equity firm specializing in the energy industry. Founded in 1983, First Reserve was the first private equity investment firm to actively pursue building a broadly diversified global investment portfolio of companies involved in the various sectors of the energy industry. Since 1992, First Reserve has raised over $12.7 billion for its buyout-focused funds. Throughout its 23-year history, the strong franchise that the firm has developed by investing exclusively in companies involved in the energy industry has served as a competitive advantage for First Reserve. For more information on First Reserve Corporation, visit http://www.firstreserve.com/

For media inquiries, please contact Kay Kayachith of CJP Communications at 212-279-3115; ext. 214, or via email at kay@cjpcom.com.

First Reserve Corporation

CONTACT: Kay Kayachith of CJP Communications, +1-212-279-3115 ext. 214,kay@cjpcom.com

Web site: http://www.firstreserve.com/http://www.genpower.net/

Source: PRNewswire

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