Independent power producer Pattern Energy continues its acquisitive ways, as the company has agreed to acquire three wind projects for a total combined equity purchase price of $372 million plus the assumption of $320 million in net debt and certain tax equity non-controlling interests.
The wind farms – the 270 MW K2, the 200 MW Post Rock and the 150 MW Lost Creek – have a total installed capacity of 360 MW, or 22% of Pattern's total generating assets.
Pattern Energy acquired 90 MW of the K2 project from Pattern Development under a right of first offer arrangement (ROFO) for a purchase price of $128 million plus the assumed estimated proportionate debt at term conversion of $218 million in the U.S. dollar equivalent.
Pattern Energy will hold a 33% equity interest in the facility, which is equally co-owned by Samsung Renewable Energy, Inc. and Capital Power LP. K2 is expected to reach commercial operation in the second quarter. The facility has a 20 year power purchase agreement with the Independent Electricity System Operator and uses 140 2.3 MW Siemens turbines, the same turbines used at Pattern Energy's operating facilities in Ontario.
Since its initial public offering, Pattern Energy has purchased 640 MW from Pattern Development.
The Post Rock and Lost Creek wind farms were acquired from St. Louis-based developer Wind Capital Group.Â
According to Pattern, the wind farms – which have been operational for an average of approximately three years – are fully contracted under PPAs with highly creditworthy counterparties. The Post Rock wind farm, located in Kansas has a long-term contract with Westar. The Lost Creek project, located in Missouri, also has a long-term power contract with Associated Electric Cooperative Inc. The average remaining life of the contracts is 17 years.
The Wind Capital deals are expected to close within 90 days and are subject to receipt of certain regulatory approvals and satisfaction or waiver of other customary conditions.
As for Wind Capital, the sale marks the end of U.S. operations for the once-promising developer, according to NTR, Wind Capital's parent company. For its part, NTR continues to find wind energy attractive and has re-entered the Irish and the U.K. wind markets, where it has secured exclusivity on over 50 MW of ready-to-construct wind projects in fulfillment of its strategy to build and operate a further 150 MW of wind in two years.
‘Growing our portfolio with three high-quality, fully contracted power facilities immediately increases our cashflow, adds important scale to our growing portfolio and provides us with a strong platform to achieve strategic and corporate finance objectives,’ says Mike Garland, president and CEO of Pattern Energy. ‘The Wind Capital Group transaction demonstrates our ability to seek out accretive third-party acquisitions of assets that are highly complementary to our fleet.’
The Hatchet Ridge wind farm, located in Burney, Calif. Photo coutesy of Pattern Energy.