Innovative Solution to Meet Growing Water and Wastewater Challenges
HARRINGTON PARK, N.J.--(BUSINESS WIRE)--
Using a new model to address water infrastructure needs, United
Water and KKR
announced today the initiation of a partnership for water and wastewater
system operations in the City of Bayonne, NJ. Operations will begin
tomorrow December 21. The agreement was approved by the Bayonne
Municipal Utilities Authority (BMUA) and by numerous state agencies.
The innovative model is a joint venture between United Water and KKR to
acquire a 40-year water and wastewater concession from the BMUA. Under
the agreement, the joint venture has made an initial payment to the BMUA
of $150 million, which will be used to eliminate the BMUA's existing
debt and improve its finances. The joint venture has further committed
to funding another $157 million into the system over the life of the
contract. KKR, which made the investment through its infrastructure
fund, will fund 90% of the joint venture with United Water.
The BMUA will maintain ownership of the water and wastewater system and
will provide oversight of the partnership and its adherence to high
quality standards and customer service performance. In addition, the
BMUA will maintain control of rates charged to users, which will be
guided by a formula in the agreement. United Water will operate the
system for the 40-year term under an operations and maintenance
agreement with the joint venture.
"What is unique about this model is that it is a blend of United Water's
operations expertise and KKR's long-term vision, which brings
credibility to address America's water challenges. Our commitment to
funding improvements in the water and wastewater system is critical to
keeping rates stable and under BMUA's control," said Bertrand Camus, CEO
of United Water. "KKR has a long history of making infrastructure
investments and a proven commitment to improving the operational and
environmental performance of the companies in its portfolio, making it
an ideal partner for this investment."
This investment in Bayonne's infrastructure will lead to improved
service reliability and water quality while maintaining rate stability.
The funds will be used to upgrade water systems and to help ease
pressure on municipal balance sheets, freeing the city to invest in
other services. The initial capital investment will provide for the
addition of highly accurate wireless water metering and other monitoring
systems, such as GIS, SCADA and CMMS, which help reduce water loss from
leakage, prioritize pipe replacement and improve operational efficiency.
"The partnership among Bayonne, KKR and United Water is a responsible
and innovative transaction that will pay off over $130 million in
Bayonne's debt, thereby cutting our municipal debt burden in half," said
Steve Gallo, Executive Director of the BMUA. "The partnership will
invest in our aging infrastructure, and provide resources that the BMUA
could not otherwise deliver. Simply put, this transaction will result in
a more efficient and reliable water and sewer system for today and
Raj Agrawal, Head of North American Infrastructure at KKR, said: "We are
thrilled to help bring this innovative solution to the city of Bayonne.
The operational and environmental stewardship of United Water, combined
with our commitment to maintain continuous investment into the system,
creates a sustainable model that will produce tangible benefits for the
city and its residents for a very long time."
Partnership Recognized by Clinton Global Initiative, American Water
This innovative model was recognized as a featured innovation the 2012 Clinton
Global Initiative Annual Meeting in New York City this fall for its
commitment to providing cities with an opportunity to address their long
term water and wastewater infrastructure needs.
United Water and KKR's partnership with Bayonne was also recognized as
Partnership Performance of the Year at the 2012 American
Water Summit. Attendees at the Summit, an annual meeting of
municipal and industry leaders, voted to recognize the partnership for
this innovative partnership approach that offers cities a new way to
meet the challenge of improving water and wastewater systems.
"Maintaining clean, sustainable water supplies is the single most
important contributor to public health and it is essential to creating
vibrant local economies. With ever increasing pressure on scarce water
resources and dwindling public funds, the private sector has a more
important role than ever to provide a lasting solution to America's
water challenge. We hope to expand this innovative model and partner
with other communities across the nation seeking a viable solution to
the increasing challenge of maintaining water and wastewater
infrastructure," said Camus.
About United Water
United Water is one of the nation's leading environmental companies,
providing water and wastewater services to approximately 5.7 million
people in the United States. In addition to owning and operating 20
water utilities, the company operates 100 municipal and industrial water
and wastewater systems through innovative public-private partnerships
and contract agreements. Founded in 1869, United Water is a subsidiary
of SUEZ ENVIRONNEMENT. For additional information, please visit United
Water's website at www.unitedwater.com.
About SUEZ ENVIRONNEMENT
Natural resources are not infinite. Each day, SUEZ ENVIRONNEMENT (Paris:
SEV, Brussels: SEVB) and its subsidiaries deal with the challenge of
protecting resources by providing innovative solutions to industries and
to millions of people. SUEZ ENVIRONNEMENT supplies drinking water to 91
million people, provides wastewater treatment services for 63 million
people and collects the waste produced by close to 57 million people.
SUEZ ENVIRONNEMENT has 80,410 employees and, with its presence on a
global scale, is a world leader exclusively dedicated to environmental
services. For additional information, please visit SUEZ ENVIRONNEMENT's
website at www.suez-environnement.com.
Founded in 1976 and led by Henry Kravis and George Roberts, KKR is a
leading global investment firm with $66.3 billion in assets under
management as of September 30, 2012. With offices around the world, KKR
manages assets through a variety of investment funds and accounts
covering multiple asset classes. KKR seeks to create value by bringing
operational expertise to its portfolio companies and through active
oversight and monitoring of its investments. KKR complements its
investment expertise and strengthens interactions with investors through
its client relationships, capital markets and global stakeholder
relations platform. KKR & Co. L.P. is publicly traded on the New York
Stock Exchange (NYSE: KKR), and references to KKR in this release
include its subsidiaries, their managed investment funds and accounts,
and/or their affiliated investment vehicles, as appropriate. For
additional information, please visit KKR's website at www.kkr.com.
Rich Henning, 201-767-9300
Source: United Water
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