SAN DIEGO-Those who follow @GlobeStcom on Twitter and @GlobeStLIVE may have seen a post teasing the announcement, but GlobeSt.com has learned that the financing for the $922-million Poseidon Carlsbad Desalination Project here has closed. The financing for Poseidon Resources includes $755 million in investment grade tax-exempt bonds, as well as $167 million in private equity.
Primary legal advisor, Dickstein Shapiro LLP, led the entire debt and equity financing for the project, which is structured as a public-private partnership and included 60 parties to the transaction. In addition to leading the complex, multiparty financing arrangements, the firm also handled the water purchase agreement and related agreements, as well as all of the project documentation for the facility, including agreements for construction operation and maintenance, equipment supply, site lease, and related arrangements, according to a prepared statement.
Co-located with the NRG Encina Power Station, the project is scheduled to begin construction immediately and will include an advanced-technology desalination plant and 10 miles of water pipeline. When complete, the project will be the largest seawater desalination plant in the Western Hemisphere and will produce up to 50 million gallons of drinking water per day.
In November, the San Diego County Water Authority Board of Directors approved the 30-year contract to purchase water produced by the proposed Carlsbad Desalination Project, and since then, more favorable decisions, like the financing above, have helped push the project forward.
According to partner Frederick Lowther, this was a “very complex deal.” The firm has represented Poseidon Resources since it was founded in 1995 and has served as outside counsel and project counsel for all of the company’s projects.
Poseidon Resources CEO, Carlos Riva, says that “With growing demand for reliable sources of fresh water, the Poseidon Carlsbad Desalination Project will be a key component of San Diego County’s overall water supply while also paving the way for future desalination projects in California and beyond.”