Enel Green Power North America Inc. (EGPNA), acting through its subsidiary Cimarron Bend Wind Holdings LLC, has signed a tax equity agreement worth approximately $500 million with three investors – Bank of America Merrill Lynch, J.P. Morgan and MetLife – for the 400 MW Cimarron Bend wind project in Kansas.
Under the agreement, the investors will contribute the above amount to the wind farm’s owner, Cimarron Bend Wind Holdings, in exchange for 100% of Class B membership interests in the project.
According to EGPNA, this interest will allow the three investors to obtain, at certain conditions provided by U.S. tax laws, a percentage of the fiscal benefits that will be attributed to the project. In turn, EGPNA, through Cimarron Bend Wind Holdings, retains 100% ownership of the Class A interests and, therefore, management control of the project.
The funding commitment came into effect at signing. Funds will be released in two phases: The first installment will be released midway through the entire project construction, and the second installment will be released upon completion of the project. The tax equity partnership will be supported by a parent company guarantee from Enel S.p.A.
The Cimarron Bend wind farm, whose construction started in April, is expected to begin operations in 2017. The project will require an investment of approximately $610 million, says EGPNA.
Cimarron Bend Wind Holdings, which owns the project through special purpose vehicles, is fully owned by Enel Kansas, a 100% subsidiary of EGPNA. Cimarron Bend Wind Holdings has taken over the project assets from Cimarron Bend Wind Project LLC.
Cimarron Bend is supported by two 200 MW power purchase agreements: one with Google and the other with the Kansas City Board of Public Utilities. Cimarron Bend is the first of Enel Group’s North American wind farms to sell a portion of the power produced to a corporate off-taker.