Tuesday, August 26, 2008

Maine biomass power plants selling to N.J. firm Covanta

By Mass High Tech Staff

New Jersey-based alternative energy site development firm Covanta Holding Corp. has agreed to pay $87 million for two biomass energy facilities in Maine.

The two, nearly identical facilities, are co-owned by Ridgewood Maine LLC and Indeck Energy Services Inc., and are located in West Enfield and Jonesboro, Maine. Both sites use wood waste such as woodchips, sawdust, bark and tree trimmings as feedstock for generating electricity.

The transaction will be funded from cash on hand and/or by drawing upon an existing revolving loan facility, according to Covanta officials.

Closing of the acquisition remains subject to certain regulatory approvals as well as approval by Ridgewood’s shareholders. These conditions are expected to be met by year’s end, the company said.

Combined, the two facilities will add a total of 49 gross megawatts to Covanta’s (NYSE: CVA) renewable energy portfolio, and represents a 35 percent increase in the company’s gross electrical capacity. Covanta’s portfolio includes six biomass facilities and 38 energy-from-waste facilities, according to the company.

Covanta intends to sell the electric output and renewable energy credits from the new facilities into the New England market. The company, which has been publicly-traded since 1992, reported $1.4 billion in revenue in 2007, with $130.5 million in net income.