Clearway Energy Inc. has entered into binding agreements related to the previously announced drop-down offer from Clearway Group (CEG) to acquire and invest in a portfolio of renewable energy projects.
These agreements commit the company, at closing, to invest an estimated $241 million in corporate capital, subject to closing adjustments. The transactions are expected to have a five-year average annual asset CAFD of approximately $23 million prior to corporate financing costs.
“The investments we are announcing not only provide Clearway additional CAFD growth but also regional diversification for the company,” says Christopher Sotos, president and CEO of Clearway Energy Inc.
“We look forward to providing additional updates in the future as we continue to work with our sponsor, Clearway Group, on additional drop-down opportunities to support the company’s long-term growth objectives,” he adds.
The following projects are included in the drop-down:
- Rattlesnake Wind: The company signed agreements to acquire 100% of the equity interests in Rattlesnake Flat LLC, which owns the Rattlesnake Wind Project, a 144 MW wind facility located in Adams County, Wash. The project has a 20-year power purchase agreement with Avista.
- Remaining interest in Repowering 1.0: The company signed an agreement to acquire CEG’s remaining interest in Repowering Partnership II LLC, which would give the company sole ownership of the partnership. Repowering 1.0 includes the 161 MW Wildorado and 122 MW Elbow Creek wind projects, which were previously repowered.
- Pinnacle Wind repowering: The company, through an indirect subsidiary, agreed to enter into a new partnership with CEG to repower the Pinnacle Wind Project, a 55 MW wind facility located in Mineral County, W.Va. In order to facilitate the repowering, the company will contribute its interests in the Pinnacle Wind Project into the partnership. The existing Pinnacle Wind power purchase agreements with investment-grade counterparties continue to run through 2031. As part of the agreement, the company has committed to make an additional payment to CEG, subject to closing adjustments, of $27 million in 2031.
The company currently intends to fund the transactions with existing corporate liquidity. This funding will occur upon each project achieving its requisite closing conditions including commercial operations, of which the company currently expects all projects to reach by the end of the year.
Photo: Clearway Energy Inc.’s landing page