Canadian energy company Capital Power Corporation has entered into an agreement to acquire the over 100MW Buckthorn wind farm in the US state of Texas from unnamed private investors for between $60m and $69m.
The purchase price range of the 100.5MW project in Erath County is dependent on the realisation of future market performance and entering into a tax equity partnership with a balance of $68m.
The transaction will be 100% debt financed and is expected to close in the second quarter of 2020, subject to regulatory approvals and other customary closing conditions.
Buckthorn started commercial operations in January 2018 and operates in the Electric Reliability Council of Texas North region.
It has two off-take arrangements with an investment grade US financial institution involving a 20-year contract for difference for 55% of the generation, and a 13-year financial hedge for the remaining 45% of the output.
Buckthorn Wind has a tax equity investor that receives the tax benefits and a portion of adjusted EBITDA and cash flow until the flip-date that is projected to occur in the late 2020s.
It features 29 Vestas turbines and has a service and maintenance agreement with the Danish manufacturer.
Capital Power expects to assume the operations manager role in early 2021 to replace the current third party O&M services agreement.
Meanwhile, construction of Capital Power’s 150MW Cardinal Point wind farm in Illinois has been completed on-schedule, with the project starting commercial operations this week.
The project cost about $246m to build and will operate under a 12-year fixed price contract with an investment grade US financial institution covering 85% of the facility’s output.
Capital Power chief executive Brian Vaasjo said: “The acquisition of Buckthorn Wind provided an opportunity to acquire a young renewables asset with a 15-year weighted average contract life remaining.
“With the addition of Cardinal Point Wind, the long-term contracts from these two new assets enhance our contracted cash flow profile and expand our renewables portfolio to approximately 1200MW with an additional 100MW in advanced development from Whitla Wind 2.”