ENERGY INVESTORS FUNDS CLOSES FINANCING FOR PANOCHE ENERGY CENTER
Construction to begin immediately on 400MW power plant

NEW YORK  (January 30, 2008) Energy Investors Funds (“EIF”), an established private equity fund manager that invests in the U.S. energy and electric power sector, announced that its United States Power Fund II, L.P. (“USPF II”) has raised construction financing for the Panoche Energy Center in Fresno County, CA.  Construction of the project is scheduled to begin immediately.  The financing was a $321 million offering of senior secured bonds under rule 144A with a 21.5-year final maturity. 

Panoche Energy Center will be a 400 MW natural gas-fired power plant located approximately

50 miles west of the city of Fresno, CA.  In April 2006, the project signed a 20-year power purchase agreement with Pacific Gas & Electric for 100 % of the capacity and electricity produced by the plant.  Kiewit Power Constructors Co. has been hired as the engineering and construction firm and is building the project on a fully wrapped, fixed-price, turnkey basis.  Panoche is utilizing four General Electric Packaged Power LMS100 natural gas-fired combustion turbines and will be the first power plant to utilize non-recourse project financing for GE’s latest power generation technology.  Construction will be completed by July 2009.

“We’re excited to be the owner of such a great project, for which we’ve served as sponsor and developer,” said Herbert Magid, a Managing Partner of EIF.  “Panoche is really a throw-back transaction and investment for EIF: PG&E’s request for offers, the tolling nature of the PPA, the single point of responsibility for the EPC are all reminiscent of many of the project financings before the merchant boom when EIF first started financing power plant development and construction.”

BNP Paribas served as the sole underwriter for the senior secured bonds raised to help finance the project.  Both Moody’s and Standard & Poor’s have rated the bonds as investment grade (Baa3/BBB-). 

“The successful financing of Panoche highlights the quality of the contracts underlying the project and our successful development efforts to date,” said Keith Derman, a Vice President of EIF.  “We’re pleased to be delivering new clean, efficient and flexible capacity to PG&E in response to their solicitation for new generation.”

Bingham McCutchen LLP served as legal advisor for USPF II. 

About Energy Investors Funds

EIF was founded in 1987 as the first private equity fund manager dedicated exclusively to the independent power and electric utility industry.  Its consistent, proven investment strategy is to create geographically and technologically diversified portfolios of electric power-related assets that provide superior risk-adjusted equity returns with current cash flow and capital appreciation.  As investment managers, EIF seeks to mitigate commodity risk (fuel and electricity) by focusing primarily on acquiring power assets with long-term off-take contracts.  EIF has mobilized over $3.3 billion in capital, and currently manages six private equity funds from its offices in Boston, New York, and San Francisco.  These funds have made over 90 diversified investments with a combined underlying asset value exceeding $7 billion.  For more information visit www.eif.com.

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