Wind farm project developers sign tax deal
By The Hutchinson News
Developers of a proposed 250-megawatt wind farm project in western Kansas signed an agreement this week for $260 million in tax equity funding for the project.
Enel Green Power, a subsidiary of Italy-based utility Enel, and U.S.-based GE Capital reached the agreement with a group of investors led by U.S. bank JP Morgan, according to a release from Enel Green Power.
The Buffalo Dunes Wind Project is planned for Grant, Finney and Haskell counties. It's being developed by TradeWinds, which has had a strategic cooperation agreement with EGP since 2006, according to Windpower Monthly.
On Tuesday, Enel's U.S. unit, Enel Green Power North America Development (EGPD), said that the investor syndicate — which includes Wells Fargo Wind Holdings, Metropolitan Life Insurance Co. and State Street Bank and Trust Co. — had committed to release the financing, subject to conditions, in the closing quarter of 2013, when the parties are to enter into a tax equity agreement.
Under such agreements, the tax benefits from renewable energy generation companies can be allocated to passive investors. In exchange for the funds, the syndicate will get an equity interest in the project — with limited voting rights — giving investors a portion of the fiscal benefits related to the project.
EGDP currently holds a 49 percent stake in the 250-megawatt project, while the rest is controlled by GE Capital's unit EFS Buffalo Dunes. The Enel subsidiary has an option to acquire 26 percent more in the project on fixed dates in 2013 and 2014, according to Enel's statement.
The project is supported by a 20-year 202-megawatt power purchase agreement with Alabama Power Company, which had the option to exit the agreement if the developer failed to secure financial backing for the project.
"We are extremely pleased with the closing of this agreement, which further demonstrates EGP commitment to Kansas and North America as a whole," Francesco Starace, Enel Green Power CEO, stated in the news release. "We are planning to further expand our installed capacity in the country, continuing to leverage on our multi-technology approach as well as maintaining high-quality standards supported by innovative technologies and a sound commercial strategy."