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Private Equity

Carlyle, Schneider Sign Electric Public Transportation JV

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Published: May 25th, 2021
The AlphaStruxure venture wields a $100 million commitment for infrastructure expansion as it builds up its first project, an electric bus system in Maryland.

Carlyle Group Inc. (CG) and Schneider Electric SA have committed up to $100 million over time to finance growth at AlphaStruxure LLC, the new joint venture platform company installing its first electric bus system in Maryland.

Carlyle Group and Schneider Electric on Wednesday, May 12, announced its energy-as-service model for Montgomery County in Silver Spring, Md., after their proposal won a sealed bid competition by the county for a micro grid and electric bus charging infrastructure project.

Instead of Montgomery County paying the capital costs, AlphaStruxure will build, own, operate and maintain the system in exchange for payments from the county for the electricity, microgrid services and charging infrastructure.

The project will kick off with energy and charging infrastructure to support at least 44 electric buses at the Brookville Smart Energy Bus Depot in Silver Spring.

“Montgomery County is our first project, and we hope to do many more of these,” Pooja Goyal, co-head of the infrastructure group at Carlyle Group and AlphaStruxure board member, told The Deal. “We’re hoping AlphaStruxure will continue to sign energy as a service agreements with customers across the board as we scale up the platform.”

The energy as a service agreement with the county closely resembles a traditional power purchase agreement. It’s structured as a long-term contract with the county, with regular payments for the power used to charge the buses.

Carlyle and Schneider Electric are financing the project with no third-party debt.

Potentially, a number of these projects could be part of a larger financing transaction once they’re up and running.

Infrastructure assets with cash flow are able to attract financing agreements, tax equity financing as well as M&A transactions between infrastructure investors.

“We are actively working with Schneider Electric on several opportunities with public and private customers — corporations, warehouse owners, school systems or universities — and we’ve got a management team that’s focused on originating these projects,” Goyal said.

The Montgomery County project will result in a 62% drop in carbon emissions with electric buses and lifetime greenhouse gas benefit of more than 155,000 tons of carbon, according to estimates from the firms.

The project will include solar photovoltaic canopies from SunPower Corp., AB Energy USA LLC onsite generation, Dynapower Co LLC battery energy storage, charging and energy management software from Mobility House GmbH and chargers by Heliox Modules BV.

M.A. Mortenson Cos. will provide construction services, and Arup Group Ltd. will be engineer of record.

AlphaStruxure is headed up by CEO Juan Macias, who formerly worked at Schneider Electric as well as General Electric Co. (GE).

Editor’s note: The original version of this article was published earlier on The Deal’s premium subscription website. For access, log in to TheDeal.com or use the form below to request a free trial.

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