Northland Power has said it intends to execute a “selective sell-down strategy” of partial interests in some of its development projects.
The Canadian developer confirmed in its half-year results that it intends to divest stakes in projects “on or before financial close” with the first notable transaction possibly occurring “as early as 2022”.
Northland Power said it will assess each opportunity individually and intends to remain “a long-term owner in the renewable projects it develops”.
Its strategy will allow it to de-risk its investments in some projects prior to construction.
Northland increased its full-year EBITDA forecast from up to CAD$1.25bn to up to CAD $1.35bn following a strong financial performance in the first six months of 2022.
It added that the new forecast factors in higher than expected debt repayments on certain European facilities, pending completion of refinancings that are currently in progress and due to close in 2022.
It added that its revised guidance could be subject to further upside should power prices in Europe continue to trade at elevated levels for the remainder of the year, particularly across its offshore wind investments.
Northland Power’s operating portfolio comprises the Gemini offshore wind farm in the Netherlands and the Nordsee One and Deutsche Bucht assets in Germany. Combined, they produced 804GWh of power in the second quarter of 2022.
Power production at its offshore wind farms increased 15% year-on-year in the second quarter of 2022, primarily due to higher wind resources and fewer unpaid curtaliments related to negative prices in Germany.
However, this was partially offset by higher uncompensated grid outages at the German wind farms.
It has reported adjusted EBITDA for the offshore wind for the quarter of CAD$141m, a 24% jump on the same quarter in 2021.
Northland meanwhile confirmed its intention to purchase a 49% stake in a fourth 225MW German development-phase project previously reported in RWE’s half-year results – which has been dubbed Godewind.
It is also in the process of raising non-recourse project level debt to build the Hai Long offshore wind farm in Taiwan, which is attracting “strong interest” from local and international lenders.
The developer is also working to secure contracts ahead of financial close for the 130MW Suba solar park in Colombia, of which it is a 50% shareholder alongside EDF Renewables.
Mike Crawley, Northland’s President and Chief Executive Officer, said: “Energy security is now a top priority in Europe. We are pleased to be part of the solution as our 1.2GW Baltic Power project development advances and we added another 225MW project, Godewind, to our now over 1.5GW Nordsee Offshore Wind Cluster project. We continue to explore other ways to create additional renewable power capacity in Europe.
“With our Asian development activities, we achieved an important milestone at our Hai Long Offshore Wind project in Taiwan subsequent to the quarter-end. The project signed a 20-year corporate offtake agreement for production from the Hai Long 2B and 3A projects and commenced bank launch to secure long-term non-recourse funding as the project progresses towards financial close targeted for 2022.
“In North America, our New York Onshore Wind projects are progressing as planned with the first turbines being erected at the Bluestone project in July and Ball Hill getting ready to receive first turbines in September.”