Innergex Renewable Energy has closed $534m construction financing for a 330MW wind project in Wyoming, the US.
The financing includes a $203m 10-year non-recourse term loan with BNP Paribas, Credit-Agricole CIB, Export Development Canada and MUFG Bank, acting as joint lead arrangers, for the construction and operation of the 329.8MW Boswell Springs wind project.
The electricity to be produced by the Boswell Springs Wind Project will be sold under a 30-year, 320MW busbar power purchase agreement signed with PacifiCorp, a Berkshire Hathaway subsidiary.
The commercial operation date is scheduled for Q4 2024.
Under the Inflation Reduction Act, the project is potentially eligible for up to 120% of Production Tax Credits (PTCs), which includes a 10% Energy Community PTC Bonus and a 10% Domestic Content PTC Bonus.
The project is eligible to benefit from the Energy Community Tax Credit PTC Bonus due to its location in an “energy community”, as defined in the Inflation Reduction Act.
The eligibility for the 10% Domestic Content PTC Bonus is currently being evaluated, which should further enhance the profitability of the project.
“We are very pleased with the terms of this financing as it demonstrates the strong market confidence in Innergex’s technical and financial abilities to develop high-quality and well-structured assets that generate attractive cash flows,” said Michel Letellier, President and Chief Executive Officer of Innergex.
He added: “In addition, the passage of the Inflation Reduction Act brings more competitiveness to the renewable energy sector than ever before by providing bonus credits for certain clean energy projects.
“In the case of Boswell Springs, we were pleased to learn that the project is eligible for the Energy Community PTC Bonus, and we decided to seize the opportunity to finance the bonus credits to substantially improve the investment economics, over and above associated cost increases.”
The procurement of wind turbines from GE Vernova’s onshore wind business has been secured and the permitting process has been completed.
The EPC contracts have been executed with Mortenson to act as the balance of plant contractor for the wind farm and AEI as the EPC contractor for the transmission line.
Construction teams are now fully mobilised on the site and have begun work on both the balance of plant and generation line.
Total construction costs of the Boswell Springs Wind Project have been revised to include financing costs related to the Energy Community PTC Bonus qualification and additional construction and development costs.
Total construction costs are expected to amount to $576m, of which $103m has already been funded through Innergex’s revolving credit facilities.
A substantial portion of the first drawdown under the Boswell Springs construction loan will refund equity over contributed by Innergex and be applied as a repayment of the revolving credit facility.
The process of securing a tax equity commitment is well advanced and expected to close during Q3 2023.
Operating cash flows from the Boswell Springs Wind Project are expected to reach approximately $22m on an annual basis.
In addition, the project is expected to benefit from 110% of the PTCs which should contribute an annual approximative $42m, indexed to inflation over a 10-year period, including the 10% Energy Community PTC Bonus.