Covanta Holding Corporation entered into an agreement to purchase two biomass energy facilities from co-owners Ridgewood Maine, L.L.C. and Indeck Energy Services, Inc. The two nearly identical facilities, located in West Enfield and Jonesboro Maine, will add a total of 49 gross megawatts to Covanta’s renewable energy portfolio, which currently includes six biomass facilities and 38 Energy-from-Waste facilities. The acquisition will represent a 35% increase in gross electrical capacity from our biomass facilities. We intend to sell the electric output and renewable energy credits from these new facilities into the attractive New England market.
Covanta has agreed to acquire these two facilities for approximately $87 million net of cash acquired. The transaction will be funded from cash on hand and/or by drawing upon our existing revolving loan facility. Closing of the acquisition remains subject to receipt of certain regulatory approvals as well as approval by Ridgewood’s shareholders. These conditions are anticipated to be met by year’s end.
“We are very excited about acquiring these two biomass facilities to expand our renewable energy portfolio,” said Anthony Orlando, President and Chief Executive Officer of Covanta. “Our operating expertise and existing infrastructure will enable us to maximize their value. Furthermore, we see strategic benefits by expanding our presence in New England, which enjoys strong demand and regulatory incentives for renewable electricity.”
Biomass energy facilities, also referred to as wood waste facilities, combust biomass to produce renewable electricity. Biomass may include: woodchips, sawdust, bark, tree trimmings, agricultural waste and wood recovered from construction demolition activities.