Puerto Rico’s P3 Authority in Landmark Acquisition of Power Generation Assets

March 19, 2024

Cleary Gottlieb advised the Puerto Rico Public-Private Partnerships Authority (P3 Authority) in the purchase by the Puerto Rico Electric Power Authority (PREPA) of certain power generators and related equipment.

The power generation assets were installed by the Federal Emergency Management Agency (FEMA) and the U.S. Army Corps of Engineers under an emergency mission that concluded on March 15, 2024, and were owned by NFE Power PR LLC, a subsidiary of New Fortress Energy Inc. (NFE). These assets have been critical to Puerto Rico’s electricity portfolio, delivering up to approximately 450 MW to the power grid.

The purchase agreement was signed, and the transaction closed, on March 15, 2024. The purchase price was $306.6 million in cash, 90% of which was funded by FEMA. The newly acquired generation assets will be in operation until December 31, 2025, and during that time will be part of the legacy generation assets currently being operated by Genera PR LLC (a subsidiary of NFE) under a 10-year operation and maintenance agreement entered into in January, 2023, among Genera, the P3 Authority, and PREPA.

Since the fall of 2018, Cleary has represented the P3 Authority, which is tasked with leading the transformation of PREPA, Puerto Rico’s vertically integrated electric service provider. PREPA is one of the largest public electric utility providers in the U.S. by customers served, with approximately 1.5 million customers. Cleary is assisting the P3 Authority in pursuing a multipronged strategy to rebuild the island’s energy system utilizing PPPs.