Algonquin Power & Utilities Corp. (APCo) says it has commenced construction of the 26.4 MW Phase I Red Lily Wind Project (Red Lily I) in southeastern Saskatchewan with the execution of a turbine supply agreement with Vestas Canadian Wind Technology Inc., receipt of all required permits and satisfaction of all conditions for project financing.
Red Lily I, initially developed by Gaia Power Inc., will consist of 16 Vestas V82 wind turbine generators. The power purchase agreement with SaskPower is for 25 years and includes a 2% annual increase throughout the term of the agreement.
APCo will provide services to and will receive fees for the development, construction, operation and supervision of the project. In addition, APCo has been granted an option to subscribe for a 75% equity interest in the project in exchange for its subordinated debt commitment, exercisable five years following commissioning of the project.
The project is owned by Concord Pacific Group, which will make an equity investment of approximately $19 million in the development of the project. Total capital investment for the project is expected to be $67.5 million. In addition to the $19 million of equity investment, the project costs will be financed with $31 million of senior debt provided by Integrated Private Debt Fund II LP and $17.5 million of senior and subordinated debt provided by APCo.
Commissioning of the project is expected to occur in early 2011. The companies have also secured additional land rights for a second phase of the project, which would provide an additional 106 MW of generating capacity, should it proceed.
SOURCE: Algonquin Power & Utilities Corp.