Enel Green Power North America Inc. (EGPNA), acting through subsidiary Red Dirt Wind Holdings LLC, has signed a tax equity agreement worth approximately $340 million with MUFG and Allianz Renewable Energy Partners of America LLC for the Red Dirt wind farm in Oklahoma.
Under the agreement, MUFG and Allianz will pay the above amount to the wind farm owner, Red Dirt Holdings, by purchasing 100% of Class B equity interests in the project.
This interest will allow the two investors to obtain, under certain conditions set by U.S. tax laws, a percentage of the fiscal benefits of the project. In turn, EGPNA, through Red Dirt Holdings, will retain 100% ownership of the Class A interests and, therefore, management control of the project.
The agreement also secures the funding commitment by the two investors, while the closing of the funding is expected upon start of the wind farm’s commercial operations. The tax equity partnership will be supported by a parent company guarantee from Enel S.p.A.
The 300 MW Red Dirt wind project, whose construction started in April, is expected to begin operations by the end of this year. The investment in Red Dirt amounts to approximately $420 million, which is part of the investment outlined in Enel’s current strategic plan.
Once fully up and running, Red Dirt will be able to generate approximately 1,200 GWh of renewable energy annually, which is equivalent to the energy consumption needs of more than 97,000 U.S. households.
The energy and renewable energy credits generated from Red Dirt will be sold under two long-term agreements: T-Mobile USA Inc. for 160 MW and the Grand River Dam Authority for 140 MW.
