Google and Citi will make a second investment in the Alta Wind Energy Center (AWEC), which is being developed by Terra-Gen Power, an affiliate of ArcLight Capital Partners and Global Infrastructure Partners, in Tehachapi, Calif. Comprising several distinct phases, AWEC is expected to ultimately have a generating capacity of 1,550 MW when completed.
Citi and Google will each invest $102 million in the 168 MW Alta V project. This is in addition to the $55 million each company invested in the Alta IV project, as announced last month, bringing each company's total investment to $157 million. The companies will now hold leveraged leases for two phases, totaling 270 MW. Citi has also underwritten the equity financing for Alta Projects II-V, totaling 570 MW.
The financing is structured as a leveraged lease, whereby the investors have committed to purchase the projects at the start of commercial operations and lease them back to Terra-Gen. Terra-Gen, will continue to manage and operate the wind projects under long-term agreements.
‘This project is a national model for the economic viability of large-scale renewable energy projects, and we hope it will encourage further investment in the space as we work to expand the clean energy economy in the U.S.,’ says Michael Eckhart, managing director and global head of environmental finance and sustainability at Citi.
The initial five Alta projects, with a generating capacity of 720 MW, are now complete and providing electricity to the grid, representing a 25% increase in installed wind capacity for the state of California. Another 300 MW is expected to be constructed and online by the end of this year. Under a power purchase agreement signed in 2006, AWEC will supply all of its 1,550 MW of wind energy capacity to Southern California Edison.
The Alta projects will use a new transmission line developed as part of the 4,500 MW Tehachapi Renewable Transmission Project, which is designed to transport electricity from remote clean energy resources in the Tehachapi region to population centers in Southern California and elsewhere.