Kentucky Infrastructure Partners (KIP) has completed the financial close for the University of Kentucky (UK) Central Utility Plant (CUP) project, clearing the way for full-scale construction of a new facility and upgrades to the university’s energy infrastructure.
The project’s total investment is approximately $580m, with financing secured after it reached commercial close on 22 May.
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The project will design, finance, build, operate and maintain a central utility plant to expand and strengthen the University of Kentucky’s heating, cooling and back-up power systems.
It will also include significant upgrades to the campus-wide district energy distribution network, as well as the modernisation of existing utility systems.
The CUP project has been identified as a key part of the university’s long-term infrastructure strategy, intended to support major expansion programmes such as the growth of the University of Kentucky Albert B. Chandler Hospital, along with other research and academic facilities.
The facility is expected to deliver expanded energy capabilities and improved back-up power intended to enhance resilience for critical healthcare services on the campus.
Under the terms of a public-private partnership agreement, KIP will be responsible for the design, construction and financing of the plant, as well as its operation for approximately 30 years after completion.
The construction phase is expected to last around 35 months, with completion scheduled for 2029.
Optimum Energy will be involved in the modernisation and optimisation of existing university utility systems.
Turner vice-president and construction executive David Opalka said: “This project will provide the critical infrastructure needed to support the future expansion of the University of Kentucky Albert B. Chandler Hospital and the University’s continued growth.
“Reliable power and resilient utility services are essential to delivering healthcare, supporting research and serving patients every day.”
The financing package for the project involves the issuance of tax-exempt Senior Revenue Bonds (Series 2026A), with a par amount of about $424m, in addition to sponsor equity and other funding making up the overall capital structure.
The project team includes developers Plenary Americas and Walsh Investors, the design-builder joint venture Walsh-Turner DBJV, and NORESCO as operations and maintenance provider.
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